Second mortgages haunting consumers

Homeowners have been receiving a lot of help from the federal government lately, which has caused some to be surprised when lenders come calling for their money to be repaid.

The Obama administration has told mortgage lenders that they must offer some sort of loan modification program to financially troubled borrowers. In some cases, unemployed borrowers can get their monthly mortgage payments reduced or temporarily suspended while they are looking for work.

The Wall Street Journal reports that some banks, like Wells Fargo, don’t like the prospect of having to forgive mortgage loans when they can collect money owed to them, even if it helps consumers avoid debt and keep their homes. The House Financial Services Committee will hold a hearing on Tuesday to address these sorts of issues, according to the Journal.

Many homeowners facing foreclosure have taken out second mortgages. The Journal said House Financial Services Committee chairman Barney Frank told big banks that "I urge you in the strongest possible terms to take immediate steps to write down these second mortgages."

Nearly 5 million consumers are currently delinquent on their home mortgage payments.