In my quest to find helpful information for homeowners who are currently struggling under the burden of a heavy and toxic adjustable-rate mortgage, I found information on FinancialStability.gov about a new federal program introduced under President Obama's plan to help homeowners struggling to hang on to their homes. The name of the program is called the Making Home Affordable program. The detailed program description describes the conditions surrounding the current housing climate, explains the purpose and intent of the program that it intends to assist 7 to 9 million homeowners who have tried in good faith to make their mortgage payments, and describes the many incentives created to influence lender and servicer participation in the modification of toxic mortgages, for example:

According to a press release by the US Department of Treasury Dated March 4th, 2009:

"Second Liens: While eligible loan modifications will not require any participation by second lien holders, the program will include additional incentives to extinguish second liens on loans modified under the program, in order to reduce the overall indebtedness of the borrower and improve loan performance. Servicers will be eligible to receive compensation when they contact second lien holders and extinguish valid junior liens (according to a schedule to be specified by the Treasury Department, depending in part on combined loan to value). Servicers will be reimbursed for the release according to the specified schedule, and will also receive an extra $250 for obtaining a release of a valid second lien."

Source link: http://www.treas.gov/press/releases/reports/housing_fact_sheet.pdf

To read more about the two options available under the Making Home Affordable program as well as basic eligibility requirements, please refer to my residential blog for related links:

http://exclusivebuyeragentseattle.blogspot.com/2009/03/making-home-affordable-program.html