Can I Get a HAMP Modification if I Have a Second Mortgage? – Jim

“Dear Steve,

Residence is underwater

Can I acquire a “HAMP’ loan modification if I have a first mortage with GMAC and a second mortage (Equity line with Wells Fargo). GMAC balance $71,000 and Wells Fargo equity balance $99,500. Zillow value is $123,400.

Please advise as Wells Fargo could not accomodate with loan or GMAC due to second mortage.

I do not want to be scamed by utilizing internet sources.

Thank you for your courtesy reply.


Dear Jim,

First off we need to start with the understanding that no lender is required to give anyone a modification.

The base eligibility requirements for a HAMP modification are:

You may be eligible for HAMP if you meet all of the following criteria:

  • You occupy the house as your primary residence.
  • You obtained your mortgage on or before January 1, 2009.
  • You have a mortgage payment that is more than 31 percent of your monthly gross (pre-tax) income.
  • You owe up to $729,750 on your home.
  • You have a financial hardship and are either delinquent or in danger of falling behind.
  • You have sufficient, documented income to support the modified payment.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

You have not given me enough information to determine if you meet those minimum requirements. If you are able to get your first mortgage modified under HAMP you may be eligible to get your second mortgage modified under the Second Lien Modification Program 2MP.

If your first mortgage was permanently modified under HAMPSM and you have a second mortgage on the same property, you may be eligible for a modification or principal reduction on your second mortgage as well, through MHA’s Second Lien Modification Program (2MP). 2MP works in tandem with HAMP to provide comprehensive solutions for homeowners with second mortgages to increase long-term affordability and sustainability. If the servicer of your second mortgage is participating, they can evaluate you for a second lien modification.

According to the HAMP website, Wells Fargo is currently participating in this program.

I would suggest you call 888-995-4673 or talk to a local HUD Housing Counselor, for free, to determine your eligibility.

Of primary concern is that you appear to owe more than 125% of the estimated market value of your home but if only the first mortgage is considered you would meet the criteria. According to the HAMP website, “You may only refinance your first mortgage. If that mortgage is less than 125 percent of the value of the property, you may qualify.” Modification rules are a bit different.

You also need to realize that a Zillow value is not market value. That can only be determined by an appraiser or after the review of comparable sales of homes similar to yours.

Please post your responses and follow-up messages to me on this in the comments section below.


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