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  • Modify Second Mortgages by JPMorgan

    For those of you borrowers out there that are struggling with one payment to the other, there is now hope as you can modify second mortgages by JPMorgan as of March. With a struggling economy and several people losing their homes to foreclosure, it seems as if these struggles will never come to an end. However, JPMorgan is taking the first small steps needed to begin implementing a recovery for borrowers to be able to keep their homes and repay their loans. These modifications apply to second lien mortgages, home equity loans, and various other second mortgages. Also known as the Second-Lien Modification Program, or 2MP, it proposes to lessen interest rates and payments on first and second mortgages, or several other outstanding home loans.


    Applying for 2MP by JPMorgan
    In order to qualify to modify second mortgages by JPMorgan, you will need to first apply for a trial modification on your first mortgage on your home. If you are approved, you will need to complete the trial, deeming you are “permanent” modification. The modification program is only eligible for those borrowers that are struggling with their mortgages but have continued to maintain interest payments. This is a small step in what could be the beginning to the end of the mass of foreclosures sweeping the Nation, but for some it doesn’t seem to offer much hope. With the assumption that about half of the distressed homeowners in the US have second mortgages, there is potential to cover about 85,000 second liens, leaving millions outstanding without the help they need.

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    Incentives to Lenders
    There are also incentives for the lenders as the 2MP provides to the lenders that have made what is termed as “piggyback” loans. These are called so as they are sort of like carrying the borrower on, despite the debt based on small payments towards interest. Basically, if the borrower had a second mortgage and were allowed to make a small or even no down payment at all during what is known as the housing boom, the lender that provided that second mortgage is eligible for the 2MP. These incentives encourage lowering borrower’s payments, assisting the borrowers in making easier payments. When the housing market peaked, there were customers with less than satisfactory credit getting these second mortgages.

    With borrowers offered to modify second mortgages by JPMorgan, there is a small advancement in the movement towards increasing the ability for a homeowner to remain in their home. Part of Obama’s initial plan, there are other banks that have taken on the fever of participating in the program. JPMorgan is only the third large bank to take part, however, showing the reluctance of these banks to take part due to the potential liabilities that are imposed on the bank. The government is offering the various incentives in order to offset these liabilities a bit, but it will take some time for other banks to decide to take the movement and participate in 2MP. This could be the future of keeping your homes for good.

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