Can I Refinance with a second Mortgage

Treasurer estimate that home-owners could reduce mortgage payment on their second pledge, possibly support over 1 million home-owners and enhance the efficiency of the first pledge amendment programme. The Treasury also published two case histories to demonstrate how the second pledge programme could be applied. It aims to help home-owners at large to avoid enforcement by creating mortgage sustainability for home owners who are eligible for a first mortgage change.

Under the Second Pledge Programme, participant officials would be obliged to leave the capital in the same ratio as any main omission of the First Pledge, with the possibility of deleting the capital completely. In the case of fully amortised mortgages, Treasury shares the costs of lowering the interest rates for the second mortgage to 1 per cent and the service providers would have to adjust the maturity of the amended first mortgage.

In the case of low-interest mortgages, creditors would have to lower the interest to 2 per cent. The interest on the second mortgage would increase after five years to match the interest rates on the amended first mortgage. The programme has similar pay incentive features to the first pledge amendment programme. Service personnel would be paid $500 in advance for successfully completed upgrades and $250 per year for a period of up to three years, provided the first pledge is maintained.

Borrower making timely mortgage repayments would also get "success payments" of up to $250 per year for up to five years to go toward the capital amount of the first mortgage. Administration also provides incentive for creditors to cancel second mortgage. In the event that a landlord is 180 of a day too late for their mortgage repayment, the Treasury pays the creditor and the investor three pennies for every dollars of the repaid credit value.

Initially anticipated to support 400,000 home owners threatened with execution, H4H has so far been largely seen as a fail. In particular, the enhancements made to this programme are likely to be beneficial to underwater lenders by contributing to an increased capital base by necessitating write-downs on the capital. It would be necessary for loans service providers to assess whether or not a debtor is eligible for H4H refinancing and to provide refinancing for eligible debtors.

If, after consulting the service provider, the service provider establishes that the borrowers are suitable for funding, the service provider must expand the funding facility while at the same offering the borrowers a change to the test credit. However, service providers and creditors are entitled to up to $2,500 in incentives for successfully funding a H4H Refund and creditors who obtain H4H Funded Notes are entitled to up to $1,000 per annum for up to three years as long as the funded Note continues to be valid.