Date Published: May 2006
Generally yes. As a general matter, a second mortgage represents a lien on real property. Defaults on mortgages (e.g., nonpayment of loan(s), lapsed insurance, unpaid property taxes, or the commission of waste, among others) may lead residents to foreclosures and evictions from their homes. STRMU benefits provide short-term mortgage payments regardless of priority (i.e. the first or second mortgages) to eliminate the threat of homelessness for an adequately housed eligible person. This would mean that a borrower could receive STRMU assistance for a payment that was clearly designated as a second mortgage. STRMU may not be used for the following activities: (i) support an open line of credit or loan that was secured by the house; (ii) taxes and insurance paid separately after the first or second mortgage is paid in full; (iii) assistance for payment towards personal loans or credit debts secured against the unit; or (iv) assistance when the first mortgage payments are not current. Careful assessment and a permanent housing stability plan should be done to determine if the client is able to maintain payments on both mortgages after the short-term assistance period ends.