Home Affordable Modification Program

by Home Owner

Ask Kate: Home Affordable Modification Program - Can I combine my first and second mortgage using the Making Home Affordable Program? I have a Fannie Mae owned first mortgage with a major lender and a second mortgage with the same lender.

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Can I combine both using the Home Affordable Refinance Program, HARP, as long as I don't exceed the 105% value?

The bank is only offering to refinance the first mortgage and says there's nothing they can do with the second lien. Is that correct?

Kate Answers: Home Affordable Modification Program - Can I combine my first and second mortgage using the Making Home Affordable Program?

Dear Home Owner,

There is not much buzz on the web right now about the Home Affordable Modification Program with the second mortgage option. April 28, 2009, the Obama Administration announced these details on the Home Affordable Modification Program:

"The Second Lien Program announced today will work in tandem with first lien modifications offered under the Home Affordable Modification Program to deliver a comprehensive affordability solution for struggling borrowers. Second mortgages can create significant challenges in helping borrowers avoid foreclosure, even when a first lien is modified."

Please note this announcement refers to the Home Affordable Modification Program, HAMP not the Home Affordable Refinance Program, HARP. Ask your lender if HAMP is a good alternative for you.

You'll find more on HARP here. You can also see a question and answer from Ask Kate about HAMP, Home Affordable Modification Program at my other website Prime-Real-Estate-Articles.

You may also find these two Q&A's as seen on the Making Home Affordable.gov website interesting:

Q: I owe more than my property is worth. Do I still qualify for a refinance under HARP?
A: Eligible loans will include those where the first lien mortgage does not exceed 125 percent of the current market value of the property. For example, if your property is worth $200,000 but you owe $250,000 or less on your first lien mortgage you may qualify. The current market value of your property will be determined after you apply to refinance.

Q: I have both a first lien and a second lien mortgage. Do I still qualify for a refinance under HARP?
A: As long as the amount due on the first lien mortgage is less than 125 percent of the value of the property, borrowers with more than one mortgage may be eligible for a refinance under HARP. Your eligibility will depend, in part, on two additional requirements: first, that the lender that has your junior lien mortgage must agree to remain in a junior lien position, and second, on your ability to meet the new payment terms on the first lien mortgage.

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If HARP and HAMP are keeping you up at night, please write me at Ask Kate where every question is a good question.

Best Wishes,

P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.

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