There are new reports stating that changes in unemployed homeowner mortgage assistance may cause difficulty for homeowners who only have income from unemployment benefits. CNN Money states that jobless benefits longer count as income for those who are applying for mortgage modifications if they have loans backed by Fannie Mae.
Many unemployed homeowners have been calling on a tier five unemployment benefits extension so that they can show they have income and qualify for unemployment mortgage assistance plans. These changes in income rules may hurt some homeowners who were attempting to gain unemployment mortgage assistance from various servicers by claiming their unemployment benefits as income.
While forbearance plans may still be offered for homeowners who have lost their job, individuals who only have income from their unemployment benefits may no longer be able to claim this income since it will not be considered permanent. While homeowners may be evaluated and offered forbearance plans for up to six months, these new guidelines will take effect on November 1, 2010.
Previously, homeowners were allowed to claim unemployment benefits when applying for mortgage assistance plans, but there is concern that homeowners who only have income from unemployment insurance will essentially be delaying the inevitable or, according to a Fannie Mae spokesman, will only be setting borrowers up to fail in the long run.
While there are still unemployment mortgage assistance opportunities available for homeowners, these changes in income claims may push some homeowners away from modifications and towards forbearance plans. The argument over these changes states that if homeowners claim unemployment benefits, which again are not permanent, as their only income, than any mortgage assistance plan or payment reduction would only help temporarily, so homeowners who are unemployed may be better suited for alternative mortgage assistance plans like forbearance options on their home loan.