The United States’ largest mortgage lender, Bank of America, has agreed to lower or eliminate payments on second mortgages in accordance with President Obama’s foreclosure prevention program.

This federal initiative also known as the Second Lien Modification Program pays incentives to second mortgage holders to work closely with first mortgage holders under the Home Affordable Modification Program.

Your browser may not support display of this image. First mortgage holders were reluctant to lower payments because of a second lien involved.  Decreasing the payment on the first mortgage without reduction in the payment on the second lien may not produce an affordable mortgage payment for homeowners facing financial difficulties.  Lack of agreement with second lien holders was also a negative factor to achieving successful modifications.

The second lien program is hoping to make a big difference because many are burdened with their second liens.  It was an important step that Bank of America is signing on because it is the nations top mortgage lender.  The program will be implemented soon as the final policies and guidelines are released and more banks are expected to sign in on the program.