Jul
07

More Aid for Unemployed U.S. and Chicago Real Estate Owners

July 07, 2011

Some unemployed homeowners are now going to have a better chance at keeping their homes.

The Obama administration on Thursday increased the amount of assistance that mortgage companies must give to certain unemployed borrowers to prevent them from losing their homes to foreclosure.

Under the new rules, mortgage companies that service loans backed by the Federal Housing Administration (FHA) will now be required to offer 12 months of forbearance for homeowners who qualify.

That means that qualified homeowners who lose their jobs can miss up to 12 months of mortgage payments before foreclosure proceedings will be started against them.

The previous policy allowed out-of-work homeowners to go only four months without a mortgage payment.

The forbearance period will also be extended for servicers participating in the Making Home Affordable Program. Currently at three months, that aid will also be extended to 12 months.

The Obama Administration is also making it easier for homeowners to qualify for the aid. And, if a borrower is denied forbearance, they will not only get a reason for the denial but will also receive at least seven days to submit additional information that might help their case.

“The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” U.S. Housing and Urban Development Secretary Shaun Donovan said.

“Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.”

Let’s hope this move helps make a difference in the country’s foreclosure rate.

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