01/18/2012 01:53 pm ET Updated Mar 19, 2012

HAMP's Second Lien Modification Saves Fewer Than 50% of Second Mortgages

In January 2011, one of the government's largest mortgage lenders, Fannie Mae, implemented the U.S. Treasury's Second Lien Modification Program. Also referred to as 2MP, slightly less than 50 percent of eligible Housing Affordable Modification Program (HAMP) second liens have been modified to date.

Through the 2MP initiative, services of second mortgages have the option to modify the lien or to extinguish it -- which is an admission that the mortgagor is not likely to be repaid for the second mortgage, and as a result, they clear their interest in the property by filing a lien waiver. To qualify for this HAMP modification directive, the borrower's first lien must be in modification. In addition, the remaining balance of the principal of the second mortgage must be a minimum of $5,000 with an existing monthly payment of $100 or more.

It should be noted that Second Lien Modification Program is voluntary, and not all banks have opted to participate. Of the major HAMP servicers, only six have chosen to do so. These services for these lenders are notified by the U.S. Treasury Department if a second lien is eligible for modification under the program. To date, over 115,000 second liens have been identified as eligible. Yet, less than half had begun the modification process. Almost 10,000 of those were extinguished.

The HAMP loan modification program continues through 2012. Initial projections estimated that 3 to 4 million mortgages would benefit from the program; however, at its current rate of 25,000 to 30,000 a month, fewer than 1 million mortgages have been modified.

If you are the holder of a second mortgage that meets the guidelines stated above, you should contact your lender to determine if they participate in HAMP's 2MP program. Some of the voluntary participants as of this writing are Citigroup, Bank of America, Wells Fargo, JP Morgan Chase, and Ally Financial.

Anna Cuevas, known as "America's Loan Modification Guru," has guided thousands of Americans in keeping their homes from foreclosure. A popular blogger (, Cuevas has been called a "superhero of the loan modification industry" and has been nominated for CNN's Heroes. She is the #1 bestselling author of SAVE YOUR HOME Without Losing Your Mind or Money.