Stop Foreclosure Answer

On April 28, the Obama Administration addressed one of the shortcomings of the Making Home Affordable Modification Program.

The original program was announced in early March.  In this program the interest rates and the monthly payments for people facing foreclosure are reduced on first mortgages so that people can save their homes.

It is estimated that up to 50% of people facing foreclosure have both first and second mortgages on their home.  .One hole in the program was that it did not address the problem of these people facing foreclosure who also had second mortgages.

This shortcoming was addressed with the addition of the Making Home Affordable Second Lien Program on April 28.  This new program states that when a first mortgage is modified under the program, the second mortgage will automatically be modified too.

There are two types of second mortgages.

One is a fixed second mortgage where the monthly payments are for principal and interest.  These payments are fixed.  Under the Making Home Affordable Second Lien program, the interest rate on these mortgages will be reduced to 1% for 5 years.  After that the rate will rise to the rate on the first mortgage.

The other type is a Home Equity Loan.  On this loan the monthly payment is interest only.  Under the new program the interest rate will be reduced to 2% for 5 years.  After that the rate will rise to the rate on the first mortgage.

I am just giving a general overview here of this latest addition to this program. There are more detailed guidelines on how this works.

I believe that this new second lien program will help more people facing foreclosure protect their families and save their homes.

Much Success,

Mark Elkins