2MP HAMP to Extinguish Equity Line Loan
I am in the process of my trial period with HAMP, I also have an equity line that I will try to put under the 2MP program. I have read and heard about how some loans after review could be extinguised. What would the guide lines be for a bank to extinguish an equity line? Mortgage Loan Modification Answer:
The decision to extinguish your 2nd postion equity line of credit is solely at the bank's discretion. Their decision will more than likely have something to do with how their bottom line is affected. They typically perform an NPV (Net Present Value) calculation to see which combination of interest rates, terms, and perhaps extinguishment would yield the best results for their bottom line, while taking into consideration your ability to afford the newly proposed loan modification.
Keep in mind that although there are specific guidelines for the banks to follow, each seem to have different interpretations of how to implement the 2MP HAMP program.
Ask your equity line lender how they would process a 2MP loan modification for you once your HAMP loan modification on your 1st mortgage has been made permanent. They might give you some information on what they would do in your case, or dismiss your question and tell you to come back after the trial HAMP modification is finished.
Please come back and let us know how things turn out for you so other visitors can benefit from information you can share.
All the best to you and your family.