DSNews is reporting that on Wednesday Wells Fargo joined Bank of America to become the second major US bank to participate in the HAMP Second Lien Modification Program.
A Step In the Right Direction
Under the Second Lien Modification Program (2MP), when a homeowner obtains a loan modification on the first mortgage the second lien holder must either modify the second as well, under proscribed guidelines, or may accept a lump sum from the government to cancel the lien. This removes a significant obstacle to relief for distressed Orange County home owners, because even if they are successful in modifying their first mortgage the remaining second could keep their debt load unmanageable.
One Quarter of All Second Liens Now Under HAMP 2MP
Wells Fargo’s decision to sign on to the 2MP is important because of the huge number of loans they service. Between Wells and Bank of America, they hold almost $265 billion worth of second liens – about 25% of the entire US market. There’s still a long way to go, but this is a positive step for home owners, the Real Estate market in general, and Orange County Real Estate too!
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