New Help from Obama Administration for Mortgage Modification – Piggy Back Loans

Up to 50 percent of at-risk mortgages have second liens.  Many financially stressed home owners are finding that these second loans or as they are commonly called piggy back loans on their primary home have been a huge hurdle for successful mortgage modification. 

The Obama administration has a new program to deal with these problem loans.  The Treasury department will begin to offer banks a cash incentive to lower monthly payments on second mortgages and/or lines of credit.   The Second Lien Program will work in tandem with first lien modification program offered under the Home Affordable Modification Program.  www.makinghomeaffordable.gov

Second mortgages can create challenges or prohibit borrowers from avoiding foreclosure even when a first mortgage is modified.   Under the Second Lien Program, when a modification is made on the first mortgage, the bank participating in the second mortgage or piggy back loan will automatically reduce payments on the associated second mortgage according to a pre-set protocol.

For more information go to www.hud.gov.

posted by Bill Desautels P: (802) 655-9100 (800) 639-4520 x217 F: (802) 655-0400 E: condoguy@condoguy.com The Condo Guy – Vermont condo real estate The Condo Guy has been providing advice to buyers and sellers of Vermont condos real estate for nearly 30 years.