Mortgage debt for homeowners who are without a job is obviously one of the driving factors behind foreclosures that are being seen across the nation. Some individuals who have completely lost their income have been relying on sources like unemployment benefits, while others may have seen a great reduction in their income due to cutbacks at their place of employment.
While home loan modifications and extension programs are set in place to assist homeowners having trouble making their mortgage payments, the Home Affordable Unemployment Program may be beneficial for homeowners who are without a job completely.
Typically, homeowners who may have no income will not qualify for the Making Home Affordable modification program, but this unemployment forbearance plan offered from the governmental modification program could be helpful in that it will allow homeowners to stay in their home while they continue to seek work by offering a suspension on their monthly mortgage payment obligation for a set period of time.
There have also been some states, through various state housing agencies, who have also implemented unemployment assistance plans, but the federal plan through the Making Home Affordable Program is usually made by mortgage servicers who, upon reviewing a homeowner’s case, may suspend their payments for at least three months or reduce their payment obligation in certain cases.
Critics of the program say that homeowners who may qualify for an unemployment forbearance plan, but are unable to find employment during that time, we’ll simply have to face foreclosure as a result. While some homeowners who are given a forbearance and have no income at the completion of their forbearance period may lose their home, but there are arguments that these homeowners could participate in a foreclosure alternative plan if their employment situation does not improve during the Unemployment Program forbearance.
Homeowners, again, will have to work with their mortgage servicer in this area, but with modifications still in place, proprietary mortgage assistance plans seeing more success, and opportunities for unemployed homeowners to find assistance through federal and state programs, it’s hoped that more homeowners will be able to avoid foreclosure despite being out of work and needing time to job hunt while the employment market improves.