Real Estate Bubble

[split710]

lentinman,


First let me say that the headline,
"Second Liens Forgiven: Are You Kidding Me?" came with the article, and "is" misleading as written.
http://www.cnbc.com/id/29513414

I agree that the way the article presents it you are correct with regards to the $250, does not even make sense. Why would a second lien holder that is owed money just forgive it?

In the detailed program description section vi it says,
that the program will include "additional incentives" to extinguish second liens, but does not say what the incentives are.

and
Servicers will be eligible for "compensation" for extinguishing second liens "to be specified by the Treasury, depending in part on combined loan to value"

and
that the servicer will "also" recieve an extra $250 for handling the second lien.

I may be reading to much into it, but I see the above as three different items, it appears to me that not "all the details" are included, I have been looking for the "specified schedule to be provided by the treasury", but as of now to no avail.


The "Making Home Affordable" updated detailed program description says,
section vi
While eligible 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 indebtedness
of the borrower and improve the loan performance. Servicers will be eligible to receive compensation when they contact second lien holders and extinguish valid second liens (according to a schedule to be specified by The Treasury, depending on part on combined loan to value) 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.

http://www.treas.gov/press/releases/reports/housing_fact_sheet.pdf