25 May 10 No 2nd Mortgage Modifications for Obama Loan Relief Efforts
According to the Huffington Post, 11 million homeowners owe more on their home loan than their house is worth, putting them “underwater.” Obama’s 2nd mortgage modification program has failed miserably because after one year and millions of 2nd loan candidates they have not modified even one second mortgage loan. This mortgage relief plan was supposed to reward mortgage servicers to coordinate principal reductions on second mortgage loans when the first mortgage is modified under the administration’s Home Affordable Modification Program.
In today’s upside-down market, homeowners who are stuck with under-water mortgages are seeking principal reductions. Many second mortgage lenders are actually lowering the principal for these borrowers because in many cases it is a better option than taking over the property from a foreclosure or surrender. Loan modification sthat simply lower the interest rate are often not enough for homeowners residing in these heavily depreciated regions like Southern California, Las Vegas and Phoenix, Arizona. According to Citi’s regulatory filings, about 28% of its first mortgages are now worth more than the underlying assets, along with about 42% of their second mortgages. Read the original article > Obama Second Mortgage Loan Modification Plan Failing
Tags: Home Affordable Modification Program, principal reductions, second mortgage loans
30 Mar 10 Obama Expands Home Affordable Modification Program
The Wall Street Journal reported that most the largest mortgage lenders carry hundreds of billions worth of home equity loans on their books. A spokesman for the California Mortgage lender, Nationwide Mortgage said “Most of the second mortgages that are defaulting are from the 100% subprime combo loans, also known as 80-20 loans.” These equity loans had high adjustable rates and many even had large balloon payments.
As home prices have nationally declined by almost 30%, these second mortgage liens are worthless in the case of a foreclosure. Second mortgage loans are usually wiped out completely during a foreclosure if the price has decreased more than 20%. Read the original article online. Many believe that Obama pushes the mortgage bailout agenda rather than correcting the core lending problems. Read the original blog post > HAMP Helping Second Mortgage Lenders?
22 Mar 10 Second Mortgage Programs Disappear
The 2nd loan lien defaults continue to rise. They have made such an impact that borrowers can no longer qualify for second mortgages to access cash or refinance unless they have excellent credit and are at 75% CLTV after the equity loan is factored into calculate the combined loan to value.
The second mortgage loans originated in 2005 and 2006 with the 80-20 loans are biggest contributor to the loan defaults. Many of those borrowers that have 100% loans were not afraid to walk away from their homes. Read the original article online > Second Mortgage Loan Programs 2010.
