Fully extinguished second liens under HAMP hard to come by
Mortgage servicers participating in the Home Affordable Modification Program fully extinguished 1,524 second lien mortgages through May, led by one servicer in particular. Bank of America (BAC) alone wrote off 1,341 second liens through an initiative under HAMP known as Second Lien Modification Program or 2MP. The next highest was Wells Fargo (WFC), which extinguished 106 seconds liens, according to Treasury Department data. CitiMortgage, the servicing arm of Citigroup (C); GMAC Mortgage, the servicing arm of Ally Financial (GJM); and JPMorgan Chase (JPM) extinguished no second liens. A BofA spokesman could not give a number of loans that could potentially qualify under the program, but he said the potential number is limited and the bank is moving through them. "Bank of America was the first to sign an agreement to participate in 2MP, so we had a head start. Since then, we’ve moved fairly quickly to get through the known inventory," the spokesman said. Fannie Mae, which administers HAMP, directed participating servicers to begin modifying second liens on Jan. 1. All Fannie servicers were required to join the program. The big-four banks held roughly half of the nation's home equity lines of credit loans, or HELOCs, representing $423 billion. As of April 2010, more than $150 billion of that were likely collateralized by homes in negative equity. Meanwhile, the rate at which big lenders modify second liens is still increasing, but at an ever-slowing rate (see chart below): Jon Prior. Follow him on Twitter @JonAPrior.