2nd Lender May Have to Write Down Principle for Loan Modifications
By Ken Crotts, Combining Experience and Innovation
Many of the loan modifications in process are running into challenges when the second mortgage holder is asked to cooperate. Homeowners trying to stop foreclosure in Maple Valley are having success with their first lien holders just to find out that the second mortgage holder is refusing to cooperate. House Financial Services Committee Chairman Barney Frank (D- Massachusetts) has sent out a petition to some of the nation's largest junior lien holders demanding that they take "immediate steps to write down second mortgages" to create a clear path for sustainable loan restructurings. Reducing a homeowner's overall debt to 31% of their monthly income so that modified payments are within their budgets requires cooperation from both the first and second lien holders. In a letter to the CEOs ...