Despite proposals in Congress, a tier 5 unemployment benefits extension has not been addressed and, many feel it will be an unlikely issue as unemployment extensions presently cover up to 99 weeks’ worth of payments for those who have lost their jobs. Yet, long-term unemployed men and women who have had difficulty finding sustainable employment feel that a tier 5 unemployment extension can be greatly beneficial, especially in areas like foreclosure prevention.
Unemployment benefits are highly debated and recent changes in qualifications for home loan modifications have almost abolished the argument that a tier 5 unemployment benefits extension would help stop foreclosures in some areas. In the past, homeowners who were receiving unemployment benefits could claim this is income concerning their qualification for a home loan modification plan.
However, reports state that homeowners will no longer be able to claim unemployment benefits as part of the home loan modification consideration process. These guidelines were set in place recently by Fannie Mae and the United States Treasury Department since there are concerns over the long-term implications of unemployed homeowners claiming these benefits as income.
There have been indications that homeowners who are unemployed and may be unable to obtain a home loan modification may be considered for unemployment forbearance plans on their mortgage. Yet, there is concern over the helpfulness of forbearance plans on mortgages where a homeowner is unemployed, as many feel this is only delaying inevitable foreclosure.
On the other hand, there are arguments for these forbearance plans for homeowners who may not receive help from a tier 5 unemployment benefits extension. While the job market is still struggling, despite reports that private employers have been adding more jobs, there are those who feel that even a temporary forbearance can be helpful for unemployed homeowners who are still seeking some form of employment.
While arguments that a tier 5 unemployment benefits extension may prevent foreclosures carry little weight since these new qualifications deny homeowners the right to claim benefits as income, it’s hoped that through options like unemployed homeowner mortgage forbearance programs, additional time may be used for homeowners to find some form of employment that may allow them to either qualify for a modification or gain the income that allows them to return to their original mortgage payment schedule.