Second Mortgages A Major Sticking Point In Effort To Help Homeowners Avoid Foreclosure As Subordinate Lienholders Fight To Keep From Getting Stiffed

The Wall Street Journal reports:

• The Obama administration's $75 billion effort to help troubled homeowners avoid foreclosure has hit a stumbling block: a fight over how to aid borrowers who have more than one home loan. The Treasury Department, scrambling to address the problem, is trying to persuade lenders to forgive or greatly reduce so-called second liens. But that effort has sparked a fight between investors who own securities backed by first mortgages and banks that hold second mortgages over how losses should be shared.

For more, see Homeowner-Aid Plan Caught in Second-Loan Spat.