Federal Government Expands Foreclosure Prevention Plan
According to a recent L.A. Times article, “The Obama administration, stepping up efforts to stem foreclosures, will offer lenders and homeowners incentives to cut payments on second mortgages, write down balances on first mortgages that are underwater, and repay loans in a timely fashion.”
About half of all distressed first loans are believed to also have a second loan in place. The plan offers financial incentives to both loan officers and borrowers for successful modifications on second mortgages. The question, of course, is whether lenders will actually take steps to help homeowners who are in trouble with their first and/or second loans.