Obama second mortgage plan can bring some relief but
you must first see if your lender participates in this program. The second mortgage relief is always welcome and this program does call for some rather significant modification, but currently there are only 4 lenders that participate in Obama second mortgage plan,
- Bank of America including Countrywide
- Chase, including EMC and Washington Mutual
- Wells Fargo including Wachovia
- Citi Mortgage
So if your second mortgage is held by someone else, tough luck then. Another large potential obstacle is that in order to obtain such a modification, the corresponding first mortgage must be already modified under the Obama mortgage plan, also known as Obama Administration's Home Affordable Modification Program.
Among other conditions one must meet to qualify for Obama second mortgage plan are,
- the second mortgage was originated on or before January 1, 2009
- it does not have an unpaid principal balance of less than $5,000 or a pre-modification scheduled monthly payment of less than $100
- it has not yet been modified under this program before
- it is not subordinate to a second lien or is not a home equity loan in first lien position
- it is not a second lien on which no interest is charged and no payments are due until the first lien is paid in full
Good luck with qualifying, but if you do, here are the benefits you may get, depending on a lender,
- interest rate reduction to 1% for second liens that pay both principal and interest
- interest rate reduction to 1% amortizing or 2% interest-only for interest-only second liens
- extension of the second mortgage term to 40 years
If the principal was deferred through forbearance or forgiven on the first mortgage, a lender must forbear the same proportion on the second mortgage. A lender is also permitted under the plan to forgive any portion or all of the second lien and receive incentives for doing so. See also, Obama mortgage loan modification plan lowers credit scores
Wed Apr 21, 2010 11:04AM | Copyright: www.bad-credit-advisor.com | More in Mortgage | Comments (0)
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