Second Lein Mod when first is less than 31%

[cityjake]

first has 93k balance on 15 yr note at 5.75% 1138 payment, second has 158k balance at 11.5% 20 year note 1645 payment. HAve lost 5k income in first 1/2 of year. Facing additional 11k loss of income in second half and medical hardship. have good credit and current but will be at risk in fall. the MHA HAMP says I dont qualify for mod because 1st is less than 31% housing payment to income ratio but when you add in second it jumps to almost 55%. how do you get the first mortgage BOA to modify so the second is done automatically? the second is Greentree and both are in MHA program. BOA offer to refi under MHA refi but second does not automatically follow. What to do?

[Moe Bedard]

It's hard to get help when you are not yet behind on your mortgage payments and trying to get a second to cooperate is very difficult to do these days. They have everything to lose.

You're going to have to negotiate separately with them.

You may want to try an offer of compromise with the second and ask if they would be willing to settle with you for a lump sum. But still, the issue you may have and most likely will have is that your not late and getting any help is going to be very tough.

[cityjake]

So with the addition of the the MHA second lein program is being underwater in of itself a leg to stand on for modification with a demonstrated loss of income now and in the near future?

With the house value at 216, with a 730 credit score what is the likely hood of getting a lender to finance 100% and getting the second lien holder to accept 123K for the 158 I owe them? If they have to forclose they would be into the house for about 270 after expenses and even if they could get FMV they would lose54k combared to the 35k if they took the lump sum? would I have to screw with my credit (go behind) to get them to make the deal?

What would be the pros/con of having an organization like ACORN negotiate a modification for me as oppose to doing it myself?

[Moe Bedard]

I have seen people settle on 2nds for 10 cents on the dollar. Getting them to agree to short pay off is also a possibility.

The advantages of having a non-profit is having an advocate and watch dog helping you. It definitely helps, but it is not a mortgage cure all.

[Paul Molinaro Esq.]

NO LEGAL ADVICE HERE - JUST GENERAL INFORMATION - ANY SIMILARITIES TO ANYONE'S ACTUAL SITUATION IS JUST ONE HECK OF A COINCIDENCE.

First mortgages and second mortgages are different animals - different rates, risk factors, investor types, etc. - and thus, different modifications result. For example, a completely unsecured second might have less of an edge against a borrower than a first lien holder with some security in the property.

- Paul