Obama 2nd Mortgage Plan Not Officially Launched

{ 2010 01 11 }

Obama 2nd Mortgage Plan Still Not Launched After 9 Months

The Huffington Post reports that a mortgage program announced in April 2009 hasn’t officially launched yet.

The program, a component of the administration’s $75 billion Making Home Affordable effort, was supposed to attack second-lien mortgages, which are additional, second mortgages taken out on a home on top of the initial first mortgage. It’s like taking out two loans to pay the same debt.

The Second Lien Program is supposed to automatically reduce the payments on a second mortgage when the first mortgage is modified under the administration’s loan modification effort, the Home Affordable Modification Program. The administration says that by lowering monthly mortgage payments, HAMP will eventually help up to four million homeowners

This is a frustrating point for me and other Los Angeles bankruptcy lawyers. Homeowners come into my office and express their extreme frustration at trying to get some of the relief which was promised and, in fact, passed through Congress and signed into law. Yet, many mortgage companies are being very stingy with the cash, stringing mortgage holders along for months, requesting more and more docs, and then still denying any assistance. Finally, after exhausting all their options, homeowners then pay a visit to their local bankruptcy attorneys.

At least in Chapter 13 bankruptcy, we can strip a second mortgage and eliminate the 2nd mortgage and lien entirely. If only they would allow bk lawyers to amend first mortgages the same way.