Sometimes, the second mortgage loan increases monthly payments and bills. Thus the second lien modification program was planned by the government to help homeowners with their second mortgage. It can benefit people in making payments.
What Is A Second Lien Modification Program?
The 2nd lien modification program allows owners to make lesser payments in their second mortgage. It was made in the combination with the Home Affordable Modification Program (HAMP). HAMP helps people to pay off their first mortgage payments, while the second lien concentrates on the second mortgage. A homeowner must have their first lien modified through HAMP before the second lien can be modified under 2MP. If one is facing problems in taking equity loan or second mortgage, then he can apply for help through this program.
Working Of The Second Lien Modification Program:
For this program to work, you need to fulfill few criteria:
- Firstly, your second mortgage payment should be above the percentage of your income.
- Then you need to meet the income guidelines so that you qualify for the loan.
- You will directly work with the lender when asking for benefits.
- You need to fill out an application letter and then write a hardship letter.
- Lastly, they will take a look at your financial documents and then help you with the program.
Rules For Second Mortgage Payments:
- Reduce the interest rate to one percent for second liens that pay both principal and interest.
- Reduce the interest rate to two percent for interest-only second liens.
- The term of the second lien will be extended to 40 years.
- If the principal was deferred on the first lien, a service provider must forbear the same proportion on the second lien.
- If the principal was forgiven on the first lien,a service provider must forgive the same proportion on the second lien; although a service provider may, in its discretion, forgive a larger portion or all of the second lien and will receive incentives for doing so.
Note that the homeowners need to show consent in sharing their first mortgage program payment with the mortgage service provider. This program has many advantages and helps a lot in paying off the second mortgage payments.
