2MP Getting Lost In The Shuffle

Posted by Orb Staff on January 19, 2010 No Comments
Categories : Mortgage Servicing

The Treasury Department's Second Lien Modification Program (2MP), a spin-off of the Making Home Affordable program, has had no takers to date, according to a BusinessWeek report published Tuesday.

2MP, introduced April 2009, provides lenders with incentives to reduce or extinguish second liens, and it was established with the goal of reaching 1 million to 1.5 million borrowers. William Apgar, the Department of Housing and Urban Development's senior advisor for mortgage finance, told the Senate Banking Committee last July that as many as 50% of at-risk mortgages also have second liens.

But in its report, BusinessWeek notes that "None of the lenders holding a combined $1.05 trillion in the debt has signed contracts requiring participation in the second-mortgage modification plan announced eight months ago."

According to the story, Treasury Spokesperson Meg Reilly said in an e-mail that the largest banks remain committed to joining 2MP.

The Treasury's most recent Making Home Affordable transaction report, which details each participating servicer's incentive cap, shows that every shop that signed up for the program prior to Oct. 21, 2009, has had its cap adjusted twice.

Reasons for adjustments include new portfolio data and new initial caps for incentives relating to subprograms Home Price Decline Protection and Home Affordable Foreclosure Alternatives. No incentives for 2MP were reflected in the Dec. 30 adjustments.

SOURCE: BusinessWeek, HUD

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