Second mortgages can be a significant stumbling block for loan modifications and short sales. Consider the following from the Washington Post:

Government officials have estimated that about 50 percent of troubled borrowers have a second mortgage. But a year after federal officials launched an initial program to lower payments on these second loans, not a single homeowner has been helped.

Yesterday, the Obama administration announced some significant changes to the HAFA (Home Affordable Foreclosure Alternatives) program. From The New York Times:

The new measures, announced by financial policy makers at the White House on Friday, are among the boldest to date. They are aimed not only at the seven million households that are behind on their mortgages but, in a significant expansion of aid that proved immediately controversial, the 11 million that simply owe more on their homes than they are worth.

As homeowner advocates, Nest is in favor of any sensible policy that offers legitimate relief for homeowners in distress. One of the HAFA changes doubles the amount 2nd lien holders receive in a short sale. This can only help.