The Obama Mortgage has been updated and now includes homeowner relief for those facing default or foreclosure with second mortgages. This update is known as the Second Lien Program.

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The New Second Lien Program

The Obama Mortgage has seen recent changes making the program more accessible to those with second mortgages. Home Affordable, informally known as the Obama Mortgage, has offered homeowner relief to millions in danger of losing their homes due to foreclosure or default. In the early days of Home Affordable, it was primarily a homeowner bailout program for those experiencing difficulty with a first mortgage--but what about families who had second liens or second mortgages? Statistics show half of all the at-risk home loans today have second mortgages or second liens in addition to the original loan. The Obama Mortgage clearly needed a modification to include help for those with more than one loan.

Fortunately, the Obama Mortgage has been updated and now includes homeowner relief for those facing default or foreclosure with second mortgages. This update is known as the Second Lien Program, and was created to work within the framework of the Home Affordable program to offer a more complete relief package for homeowners in trouble.

When borrowers apply for homeowner relief under Home Affordable loan modification, lenders participating in the Second Lien Program must automatically reduce payments on second mortgages. Loan officers also have the option to eliminate the second mortgage or lien completely. This is done if the borrower agrees to make a lump sum payment on the loan. Terms are negotiated according to protocols set by the Obama Mortgage program. The Second Lien program is not available at all banks; if you want to apply for loan modification under the Home Affordable program, make sure your bank is a participating lender in the Second Lien program before signing any paperwork.

MORE CHANGES TO THE OBAMA MORTGAGE

There are additional modifications to the Home Affordable program. One important new feature comes into play when the lender is evaluating a borrower's eligibility for loan modification. Updated Obama Mortgage rules state the lender can't evaluate a borrower for loan modification without considering the borrower for refinancing under the FHA Hope For Homeowners program.

This gives distressed borrowers in need of homeowner relief additional options for avoiding default and foreclosure. No one may keep a qualified, eligible borrower from a low interest rate, fixed payment FHA Hope For Homeowners loan. In the past, if you didn't know about the options available to you, it was possible to miss out on additional homeowner relief options unless the loan officer informed you. Now being considered for the Hope For Homeowners program is a requirement whether or not you knew to ask for such assistance.

The new rules say participating lenders are required to review your circumstances to see if you qualify for the FHA's Hope For Homeowners bailout program--but they can't begin that process unless you apply for help. The most important thing borrowers fearing default or foreclosure should do is pick up the phone or pay a visit to the lender to begin the application process.

These alterations to the Obama Mortgage make homeowner relief more accessible than ever. Ask your loan officer about the Home Affordable Program and the FHA Hope For Homeowners program. The new rules are designed to help you keep your home.

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