The Obama administration has released details on a new plan to help homeowners under its Making Home Affordable program.

The move will make it easier for borrowers to modify or refinance their loans under the Federal Housing Administration’s Hope for Homeowners program, according to Shaun Donovan, secretary of the Department of Housing and Urban Development (HUD). “We encourage Congress to enact the necessary legislative changes to make the Hope for Homeowners program an integral part of the Making Home Affordable Program,” he said in a statement.

The Second Lien Program that was announced will work in tandem with first-lien modifications offered under the Home Affordable Modification Program.

Under the program, when a Home Affordable Modification is initiated on a first lien, servicers participating the second-lien program will automatically reduce payments on the associated second lien according to pre-set protocol, said HUD.

“Alternatively, services will have the option to extinguish the second lien in return for a lump-sum payment under a pre-set formula determined by Treasury,” said HUD.

The Hope for Homeowners program originated with last year’s housing rescue bill. It got off to a sluggish start and was criticized by some as hard to use.

Separately, the administration announced steps to incorporate the FHA’s Hope for Homeowners into Making Home Affordable, a plan that was announced by the Obama administration in February.

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