Introduction To Second Lien Modification Program


Everybody loves super heroes. From Superman to Batman, to Captain America and the Green Arrow, we recognize within each one a little of our own fundamental belief in justice, fairness and humanitarianism. Sometimes we wish they were real, because, these days, the world could use a few caped crusaders performing masked magnificent acts. Fortunately, for American homeowners, a super hero does exist. Making Home Affordable (MHA), an official program of the Department of Treasury and the Department of Housing and Urban Development, has helped thousands of families keep their homes with refinances, modifications, rate reductions and deferred payments.

SEE ALSO: HARP Versus HAMP: One Letter, World Of Difference

Thousands Found Help In HAMP

You may already be familiar with HAMP, the Home Affordable Modification Program. Designed to help employed homeowners who are having difficulty meeting their mortgage obligations, the HAMP program offers rate and term changes to reduce your payments to 31 percent of your verified monthly pre-tax income. In June 2012, the Obama Administration expanded the scope of the HAMP program, to aid even more distressed homeowners. Expansions include modifications for rental properties, changes in debt-to-income ratio requirements and a second chance for homeowners who defaulted on a previous HAMP modification.

More Help In 2MP

If you modified your first mortgage under HAMP, you can now benefit from a modification or principal reduction under the Second Lien Modification Program (2MP). Designed to address the long-term affordability and sustainability issues inherent in second mortgages, 2MP is a lifesaver for homeowners who bought properties during the housing boom with 80/20 mortgages, often at adjustable rates. Homeowners with unaffordable home equity loans and home equity lines of credit (HELOC) may also benefit. Some of the ways servicers may modify the rate and term of a second lien under the 2MP program include reducing the interest rate to 1 percent on amortizing loans, reducing the rate to 2 percent on interest-only loans or extending the term to 40 years. If the servicer forgave any of the principal of the first mortgage under a HAMP modification, they must forgive the same proportion on the second lien under 2MP.

SEE ALSO: Home Equity Loans: The Ins And Outs

Modification Nitty-Gritty

As with HAMP, not all homeowners will qualify for 2MP. For starters, you must have originated your second lien on or before January 1, 2009. The balance on your second mortgage, home equity loan or HELOC must be $5,000 or more. You must have a HAMP modification on your first mortgage, and you must also have made those adjusted payments regularly, never missing three or more consecutive months. In addition, your record must be free of felony convictions within the last 10 years. Check with your current mortgage holder to see if they participate in the program. Sometimes, super heroes are real. If you believe HAMP and 2MP can help you, contact the Making Home Affordable housing experts at 888-995-HOPE. Their free 24-hour assistance is available in more than 160 languages—and you don’t even have to flash the Batman signal across the night sky to get attention.

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