Many people may not have even known about the program, but President Obama's Second Lien Modification Program, a "complementary program" to the Home Affordable Modification Program ("HAMP"), appears to be over. If you are not familiar with the Second Lien Program, it was intended to help homeowners who had more than one mortgage loan adjust the terms of the second mortgage. When the program was announced back in April, the Treasury Department's release stated that when a HAMP modification was initiated on a first mortgage, the Second Lien Program would "automatically reduce payments" on any second mortgage on that home. As with the HAMP, mortgage servicers had to enroll in the program with the Treasury Department to participate. However, it appears that not a single servicer enrolled in the Second Lien Modification Program.
So, what does this mean for most homeowners? Be wary of some of the mortgage modification programs being advertised. While there is a federal modification program (at least for first mortgages), the federal modification programs are not being utilized by the mortgage servicers to the extend many people thought. Unfortunately, there are many people trying to take advantage of homeowners who are looking for help. If you are trying to obtain a loan modification, check to see if your mortgage servicer participates in the HAMP. Then, if you need help, make sure you do your research on the company that you engage to help you. Using a bankruptcy or foreclosure defense attorney may be your best option.
