I've noticed that the number of 2nd mortgage extinguishments has been rising lately. I'm hoping someone on this forum can help me better understand how this works. Here are some questions...
1. What are the eligibility requirements? Does my first mortgage have to have been modified under HAMP for my 2nd to be eligible for an extinguishment?
2. I've heard that banks get paid 12% of the loan balance if they extinguish a 2nd mortgage. Is this true?
3. I've been following the "strategy" and have been holding out for a 5% settlement. If the bank gets 12% from the government, then why would they settle for less than 12% from me?
I appreciate any information you can provide. I've been having trouble finding anything clear and current.