JPMorgan Chase & Co. has also agreed to participate in the federal government program that will assist homeowners by modifying second lien mortgages, home equity loans and other second mortgages.
The program is formally known as the Second-Lien Modification Program, and is called 2MP for short. It was created to work in partnership with HAMP, and it should help homeowners' with lowering their monthly payments on both their first and second mortgages as well as any home equity type loans that they may have outstanding.
It is also referred to as the second-lien program that is part of federal government's Home Affordable Modification Program. Chase is now the third major national bank or lender to offer this assistance.
The program will offer those banks and lenders who made piggyback loans, which are second mortgages that allowed consumers to make a small or no down payment during the housing boom, various cash incentives and other financial benefits if they agree to lower payments of struggling borrowers. Chase offered these types of loans during the housing boom. Also, during the nations housing market's peak, even customers with spotty credit ratings and history were able to get such mortgages.
The 2MP piggyback mortgage modification program will help breathe some life into the housing market, and it will aid neighborhoods across the country. The Second-Lien Modification Program will relieve some drag in the housing market because those banks, lenders, and mortgage servicers who extended second mortgages can now veto a borrower's efforts to modify their primary mortgage. This new program will greatly reduce the chance that the lender will reject a modification, and almost prevent that veto from occurring.
In addition, note that the Second-Lien Modification Program (2MP), was also designed to work in tandem with the federal government HAMP program. Together these two resources should save thousands of people from losing their home to a foreclosure.
Under 2MP, homeowners may see the interest rate on their second lien reduced as low as 1 percent for five years. The program also provides a financial incentive to borrowers, servicers and investors if the modification is successful.
To qualify for help, homeowners will need to successfully complete a trial modification on their first home mortgage. After this has been done, they may be able to get relief on their second loan or home equity loan. Chase will seek to modify second liens whether the first loan is serviced by Chase or by another loan servicer when it implements the 2MP program.
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