Mortgage assistance aimed at directly helping unemployed homeowners may come from various sources and address issues through different programs as both federal and state unemployment assistance plan may be an option for homeowners who are without a job. Typically, homeowners who may be participating in the Making Home Affordable Program could have forbearance options on their mortgage payment, while others have a variety of options which could be available through state-directed unemployment aid from the Hardest Hit Fund.
Unemployment mortgage assistance which may be available through various state housing agencies and state-directed programs do differ from state to state but many have similarities in that they either offer assistance in the form of a grant-like subsidy which will be paid to a servicer for a set period of time or some states may offer a loan for a set amount to cover the costs of an unemployed homeowner’s mortgage payment and, if certain conditions are met, this loan will come at a 0% interest and may be forgiven.
Obviously, the funds which may be granted to homeowners from various state housing agencies will essentially make a homeowner’s payment for a short time until they are able to get back on their feet. Usually, homeowners are required to be in a situation where short-term financial problems have arisen, but a past history of mortgage payment stability is present, since funding is not meant to be a long-term solution within many of the state-directed programs.
On the other hand, homeowners may be able to take a advantage of a forbearance program from the Home Affordable Unemployment Program, which is hoped to alleviate the burden of mortgage payments that unemployed individuals are facing at the present time as they seek work. As an example, income which is received by an unemployed homeowner from unemployment benefits is no longer able to be claimed when a homeowner is seeking a home loan modification, so this obviously disqualifies many unemployed homeowners from the modification program.
However, the Unemployment Program ideally will give homeowners either a reduction in their mortgage payment, which is similar to a modification, or a forbearance which will allow a homeowner to completely forgo making their home loan payment, both of which will last for a set period of time, which is usually a minimum of three months. While unemployed homeowners will either serve a three-month or more timeframe where they are offered forbearance or a reduced payment, it’s hoped that a more stable financial position will be found by the homeowner or income from an employment opportunity will arise, which may then qualify them for a modification.
Yet, these programs are not guaranteed to prevent foreclosure as many homeowners who have lost their jobs have sadly also lost their homes in the following months. However, homeowners may contact their mortgage servicer, state housing agency, or consult resources like the Making Home Affordable website or hotline for more information about foreclosure prevention and these unemployment mortgage assistance option. The Unemployment Program from HAMP is already in place, but many of the state-directed foreclosure prevention efforts may still be in the early stages or will not be offered until 2011, so homeowners may have opportunities to still qualify for these options within their particular state.