What You Need To Know About Second Lien Loan Modification Programs
When helping homeowners avoid foreclosure we typically focus on the primary mortgage loan. But many homeowners have a home equity loan or line of credit that threatens their homeownership status. Even after getting a modification on the first loan, our work may not be done; some people need help with a second mortgage to ensure they can afford all of their house payments going forward.
The “Second Lien Modification Program” (2MP) helps its customers get lower payments on these second lien products. (A second lien mortgage is any 2nd loan against your home’s value.) There are certain requirements to be met:
- The first mortgage must be permanently modified under HAMP (the Home Affordable Modification Program) after successfully completing the trial period.
- The home equity account must have been opened before January 1, 2009.
- The principal balance must be greater than $5,000, with a monthly payment of at least $100.
- The modified first mortgage must be in good standing (never been three or more payments over due since the HAMP modification).
- Homeowner must be free from certain felony convictions in the past 10 years.
Right now, there are 17 major mortgage loan servicers participating in 2MP, including Bank of America, CitiMortgage (pdf), Wells Fargo, JPMorgan Chase and more.
Many people who are eligible for 2MP will be automatically contacted about the program when their first mortgage is modified under HAMP.
If your second lien servicer hasn’t contacted you about 2MP, a HUD-approved housing counselor can help you determine if you are a good candidate. If not, s/he can help you explore your other options, such as repayment plans, extensions, or other loan modification programs that can help you get financial relief and avoid foreclosure. Call us today for free counseling and we’ll answer any questions you have.