On August 13, 2009, the US Department of Treasury (Treasury) published Supplemental Directive 09-05, introducing the Second Lien Modification Program designed to work in tandem with the Home Affordable Modification Program (HAMP). The Supplemental Directive 09-05 was revised on March 26, 2010.
HAMP and the Second Lien Modification Program (which is named "2MP") are meant to create a "comprehensive solution to help borrowers achieve greater affordability by lowering payments on both first-lien and second-lien mortgage loans."
On September 21, 2010, Fannie issued Announcement SVC-2010-14, which introduces its Second Lien Modification Program and provides guidelines to Fannie servicers.
All Fannie Mae-approved servicers must participate in the program for all eligible Fannie Mae second-lien mortgage loans and must implement the 2MP program no later than January 1, 2011.
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Highlights
Modification Eligibility
- Borrowers in Bankruptcy
- Coordination with Other Making Home Affordable Programs
Modification Process
- Matching Second Liens to HAMP First Liens
- Reliance on First-Lien Data
- Standard Modification Steps
- Compliance with Applicable Laws
- Borrower Communication
- Trial Period Requirements
- Borrower Response
- Effective Date of 2MP Modification
- Reclassification or Removal of MBS Mortgage Loans Prior to Effective Date of Modification
- Borrower Notice
- 2MP Modification Documents
- Assignment to MERS
Use of Suspense Accounts and Application of Payments
- Monthly Statements
Reporting Requirements
- Reporting to Fannie Mae Through HSSN
- Reporting to Treasury
- Reporting to Credit Bureaus
Mortgage Insurers
- Mortgage Insurer Approval
- Reporting to Mortgage Insurers
Fees and Costs
- Servicing Fees
- Late Fees
- Administrative Costs
Incentive Compensation
- Servicer Incentive Compensation
- Borrower Incentive Compensation
- Re-default and Loss of Good Standing
Compliance
Record Retention
Transfers of Servicing
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Visit Library for Issuance
Fannie: Home Affordable Modification Program:
Introduction of Second Lien Modification Program
SVC-2010-14
September 21, 2010
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