The always excellent Calculated Risk goes into the simple reasons why 2nd mortgage holders are unlikely to embrace HAFA. When a 2nd mortgage holder can only recover 3% of the loan or $3000, whichever is LESS, and they have to release the seller from all future liability, I can see why they will not be quick to take the deal. In Minnesota, a foreclosure does not wipe out the 2nd lienholder's rights and therefore it's quite possible that they will seek future payments via collections - I could imagine them … [Read more...]