Sep
6
Can I Get a Mortgage Modification On My Second Mortgage
Filed Under Loan Modification Options Things You Should Know | Leave a Comment
Elena Cachia
Home Loan modifications were made to make the housing payment more manageable, generally by lessening the interest rate, prolonging the loan term and, rarely, by reducing the loan balance. Do not confuse it with a normal refinance mortgage, which pays in full the existing mortgage with a new home loan, but it must meet the lenders conditions.
The “Making Home Affordable” plan from the Obama administration, a new second-mortgage plan permits applicants whose first mortgages are modified to automatically have their housing payment decreased on their junior liens as well, subject to both the primary and secondary lienholders participating in the program.
Currently, a dozen or more mortgage servicers participate in the program. Included in the pool are the big lenders such as Bank of America, Chase, Citibank, Wells Fargo and others.
Borrowers who are prequalified seeking to modify their first mortgage terms need to:
“ Be an owner-occupant of the home;
“ Have an unpaid principal loan balance that is less than $729,750;
“ Have a loan that was created on or before Jan. 1, 2009;
“ Have a mortgage payment (including taxes, insurance, and home owners association dues) that is greater than 31 percent of their gross monthly income;
“ Have a mortgage payment that they are unable to pay, possibly due to a significant change in income or expenses.
In addition to decreasing the housing payment, lenders are abel to select to eliminate a homeowners junior mortgage in exchange for a one-time big payment from the federal government.
Incentives for Short-sales
In a short sale, the lender will consider the mortgage paid off in return for the sales price the homeowner can get. Although, the difference in the sales price and the greater existing loan is at times termed to be income whereby the seller could be taxed. Since it it a possibility, it is a good idea to use the service of a tax professional in the transaction.
Under the new short sale program from the Obama administration, lenders are able to get back a $1,000 payment from the U.S. Treasury for letting the homeowner to sell the house for less than the balance due on the mortgage and for approving the proceeds as full repayment, versus letting it be categorized as a short sale.
Lenders are able to receive $1,000 for approving a deed-in-lieu deal, in whereby the deed to the property is basically transferred to the lender instead of letting it go through an expensive foreclosure. Homeowners who approve a short sale or deed-in-lieu transaction are eligible to get back up to $1,500 in closing costs. To help stop second mortgages from delaying the deal, the Treasury department will give borrowers who have junior liens up to $1,000 to release their claims in such transactions.
Home Loan modifications were made to make the housing payment more manageable, generally by lessening the interest rate, prolonging the loan term and, rarely, by reducing the loan balance. Do not confuse it with a normal refinance mortgage, which pays in full the existing mortgage with a new home loan, but it must meet the lenders conditions.
The “Making Home Affordable” plan from the Obama administration, a new second-mortgage plan permits applicants whose first mortgages are modified to automatically have their housing payment decreased on their junior liens as well, subject to both the primary and secondary lienholders participating in the program.
Currently, a dozen or more mortgage servicers participate in the program. Included in the pool are the big lenders such as Bank of America, Chase, Citibank, Wells Fargo and others.
Borrowers who are prequalified seeking to modify their first mortgage terms need to:
“ Be an owner-occupant of the home;
“ Have an unpaid principal loan balance that is less than $729,750;
“ Have a loan that was created on or before Jan. 1, 2009;
“ Have a mortgage payment (including taxes, insurance, and home owners association dues) that is greater than 31 percent of their gross monthly income;
“ Have a mortgage payment that they are unable to pay, possibly due to a significant change in income or expenses.
In addition to decreasing the housing payment, lenders are abel to select to eliminate a homeowners junior mortgage in exchange for a one-time big payment from the federal government.
Incentives for Short-sales
In a short sale, the lender will consider the mortgage paid off in return for the sales price the homeowner can get. Although, the difference in the sales price and the greater existing loan is at times termed to be income whereby the seller could be taxed. Since it it a possibility, it is a good idea to use the service of a tax professional in the transaction.
Under the new short sale program from the Obama administration, lenders are able to get back a $1,000 payment from the U.S. Treasury for letting the homeowner to sell the house for less than the balance due on the mortgage and for approving the proceeds as full repayment, versus letting it be categorized as a short sale.
Lenders are able to receive $1,000 for approving a deed-in-lieu deal, in whereby the deed to the property is basically transferred to the lender instead of letting it go through an expensive foreclosure. Homeowners who approve a short sale or deed-in-lieu transaction are eligible to get back up to $1,500 in closing costs. To help stop second mortgages from delaying the deal, the Treasury department will give borrowers who have junior liens up to $1,000 to release their claims in such transactions.