Second Liens Forgiven: Are You Kidding Me?

Amid the dozens of pages of details of the Obama mortgage modification plan, one new element will likely not make it into the headlines because it’s something of an afterthought.

It has to do with second liens, that is piggy back loans or home equity lines of credit.

Deep deep in the pages of the plan, is paragraph vi. Second Liens: While eligibly 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. 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.

/wow, this is a real gravy train now, if you [expletive deleted] up your mortgage, the taxpayers are going to pick up the tab for any home equity loans you compounded your original mortgage [expletive deleted] up with too