The federal government has created a new mortgage assistance program for unemployed homeowners. It helps those that are currently without a job, and it supports people that are on the verge of losing it. The Home Affordable Unemployment Program will be able to help thousands of homeowners across the country with making their monthly mortgage payments. Using government grants, abatements and counseling, it should stop or delay many foreclosure filings across the country by providing unemployed individuals with much needed time to search for new work.
The Home Affordable Unemployment Program (HAUP) provides homeowners with different options and ways to get help. The main component of the program is that it will provide homeowners the ability to a apply for a forbearance on their home loan which will in effect allow them to reduce their monthly mortgage payments for up to six months. This provides people the time that they often critically need. It is important to note that the forbearance period may be extended in some circumstances if the borrower has not yet found a new, stable job at the end of the initial period of time.
As with most government mortgage and foreclosure assistance programs, there are numerous conditions and qualifications that need to be met. To qualify for aid, a homeowner must currently be out of work and they also must be receiving unemployment compensation payments from their state. They must be able to prove it as well. In addition, the mortgage needs to be past due or the loan needs to be at risk of default. However, if the borrower is too far into the default or foreclosure process, the homeowner will not be eligible for any assistance from the government. Therefore the homeowner needs to apply for help before the mortgage is more than 90 days past due.
Another condition of the program is that the home must be the borrower’s principal residence and the mortgage balance can’t be greater than $729,750 for a single-family home. There is some flexibility here, as higher limits are allowed for up to a four-unit residence, provided that one unit of the multiunit housing structure is the borrower’s primary residence.
Homeowners who are approved through the program and who receive a mortgage forbearance will have their monthly mortgage payments greatly reduced. The exact amount will vary, but in general their monthly payment will be lowered to no more than 31 percent of their gross monthly income, even if it just unemployment insurance, during the forbearance period.
If someone does find a new job during this timeframe, borrowers must inform their lender and mortgage servicer if they find work during the forbearance period. If a borrower is unable to find a new job and if they are still unemployed at the end of the mortgage forbearance period, their personal situation and financial condition will be reviewed to determine if they can get an extension as part of the Home Affordable Unemployment Program. Or they may be qualified for other support from the government, such as free foreclosure counseling or they may be eligible for a HAMP modification.
It is critical that during the forbearance period that you continue to make your monthly mortgage payments on time. If you think you may be late or have difficulty in making a payment, call your servicer as soon as you think it may occur. Do not wait. If you miss one of these monthly bills or are late, it may jeopardize your continued eligibility as part of the Home Affordable Unemployment Program.
The federal government continues to increase the number of options and programs for those who have lost their jobs, had a reduction in hours, the unemployed, and individuals with a reduction in income. Click here to read about other programs, including HUD approved resources.
If you think you may meet these criteria, and if you think the program can help you, interested borrowers should contact their bank, lender, and/or mortgage servicer and ask about this program. they should ideally look into a mortgage forbearance early-, while you are unemployed and looking for work. Their mortgage servicer must be participating in the Home Affordable Modification Program (HAMP). Most lenders and servicers do participate in the federal government program, so it is just a matter of asking them.
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