The second lien modifications for Citigroup saw an increase between May and June according to reports released here in August from the Treasury Department, which not only tracked the number of second lien modifications that had been started in total for Citigroup but also homeowners who saw a full extinguishment of their second mortgage and active modified mortgages that may have offered a partial extinguishment of these second lien debts. Homeowners who may have a second mortgage have often found that even when they are able to qualify for a primary modification from the Home Affordable Modification Program, supplementary programs like this second lien modification plan may be necessary in order to bring their overall mortgage payment to a more affordable level so that foreclosure can be avoided.
Yet, not all servicers are seeing success in this area, but there are increases in offers being made for the second lien modification plans, despite the fact that not all homeowners have been able to benefit from this particular program. However, Citigroup did see some changes for the better as they increase the total number of secondary modifications that had been started from a 4,003 in May to 4,944 in June. Also, there were reportedly zero full extinguishment offered to homeowners as if the May Treasury Department report but that number increased to 791 in June, which is obviously going to greatly help homeowners who are facing particular trouble with their second mortgage. Furthermore, the number of active modified second liens that may have offered partial forgiveness increased from 3,994 to 4,132.
Again, not all homeowners are going to be in a position where they can benefit from this plan as certain qualifications must be met, but in instances where homeowners may simply be dealing with problems related to their mortgage that may have been the result of short-term financial setbacks or a reduction in wages, the opportunity to simply have their mortgage payment reduced to a more affordable level might be all that is needed to help them avoid foreclosure. Obviously, in cases where a primary home loan modification is not enough, there are those who have defaulted once more and even faced foreclosure, but when a second lien is in place and could be the cause of these troubles, homeowners have been urged to speak with their servicer about this particular plan within HAMP.
Many of the major mortgage servicers participating in the federal modification program are working to offer a variety of plans and, for Citigroup homeowners and many others, there are options that can deal with problems related to unemployment, negative equity, or the simple need for a more affordable mortgage payment. While servicers and homeowners have still had troubles, as more banks work to correct problems, which may have led to higher levels of foreclosure than may have been necessary, it’s hoped that more homeowners may find the solutions they need to their problems through these modification efforts.