Housing Policy

Don't Worry, America. You're Still Paying to Bail Out Second Mortgages.

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Nibble, nibble, like a mouse. Who's that nibbling at my house?

I recently gave a hopeful thumb up to Calculated Risk's evidence that the Treasury Department's $75 billion Housing Affordable Modification Program (HAMP) had abandoned its ill-advised scheme to guarantee modifications on second-lien mortgages.

HousingWire quotes Treasury spokeswoman Meg Reilly as saying, "That rumor is wrong."

And in an email to Calculated Risk, Reilly also says that the progress ramp-up to systematization will soon lead to finalizement:

The Second Lien program is moving forward. Treasury has been working to create program infrastructure and technology, including a new platform that matches second liens to first liens modified under HAMP. Because there has not been a systematic method of notification to second lien holders when a first lien on the same property is modified, ramp up has taken some time. We have made enormous progress and continue to move forward with innovative technological development and program implementation and expect to finalize servicer contracts soon.

Sorry for the bum steer. For many reasons why the second-lien program makes, in Fluffy's words, "beyond no sense," dig the comments on my original post.