GO
Loading...

White House Plans Aid For Second Mortgages

The Obama administration Tuesday will unveil measures to address the role of second mortgages or other liens on properties that might be pressuring consumers and businesses.

Thus far, all of the government’s mortgage modification and foreclosure prevention efforts have been focused on primary, or first, mortgages.

AP



It’s unclear how much money is being targeted for the initiative, but it could run as high as $50 billion, but an industry source says funding could come from the TARP, which the administration previously tapped for its initial housing relief initiative.

The government recently said there is about $100 billion left in the $700 billion fund.

Under the terms of the plan being discussed, if a first mortgage is being modified, then the second one would automatically be modified as well.

____________________________________
Calculators and Advice from Bankrate.com:

  • Compare Mortgage Rates Nationwide
  • Struggling to Save Your Home? Get Help Here

_____________________________________

Industry support for the plan is thought to be strong.

“Right now they get nothing,” said the source. It’s a choice between nothing and something.”

The Obama administration has been working on the second mortgage plan for some time.

Virtually all the major lenders--and loan servicers--engage in the second mortgage business. Large banks hold 54 percent of the secondary market.

Blog: RealtyCheck with Diana Olick

The House Financial Services Committee Tuesday continues work on mortgage reform legislation, which is meant to crack down on predatory lending.

Contact Real Estate

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More
  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

Latest Special Reports

  • Financial advisors stress that now is the time for investors to get serious about year-end financial planning checkup.

  • File photo: Participants at a hacking conference in Germany

    A series of high profile cyber attacks has created huge economic opportunity as businesses look to fend off future attacks.

  • Is an active twist on passive investing the right portfolio move? An inside look at the rise of ETF strategists.