Federal Loan Modifications Expanded to Second Mortgages

Last week, the U.S. Treasury Department announced the expansion of the Making Home Affordable Program to help reduce payments on second mortgages. According to the Treasury Department, as many as 50 percent of all at-risk borrowers have second mortgages. Under the second lien effort, if the servicer starts a modification on the first mortgage, participating servicers will automatically reduce payment on the second lien in accordance to complex, but uniform, criteria. Servicers may even erase the second loan in exchange for a lump sum payment.
Homeowners now have the ability to submit questions to the Administration's housing team. Members of the Treasury and HUD staffs will periodically select commonly asked questions and post responses on MakingHomeAffordable.gov. To submit a question, homeowners can visit www.MakingHomeAffordable.gov/feedback.html. Selected questions from homeowners across the country and responses from the Administration will be available at www.MakingHomeAffordable.gov/asked-and-answered.html.