Unemployment Mortgage Assistance And Foreclosure Alternatives–Can Jobless Homeowners Save Their Home?

Mortgage assistance programs are available to help homeowners in a variety of positions, but many unemployed homeowners are finding that mortgage assistance may not help when it comes to foreclosure prevention efforts and as a result foreclosure alternatives may need to be considered. However, there are some ways which jobless homeowners can still save their home through programs from federal programs and private lenders.

Homeowners who are unemployed and relying on unemployment benefits as their only source of income may not be able to qualify for a federal home loan modification. In the past, some homeowners had been able to use unemployment benefits as a source of income when applying for modification assistance, but since this type of income is not sustainable, home loan modifications have become less available to homeowners without a job.

Yet, forbearance on home loan payments has been available to homeowners over the past months when employment has become a problem. While there have been some homeowners who were able to have a short-term reduction on their mortgage payments through the Home Affordable Unemployment Program, others were able to outright forgo their monthly mortgage payments thanks to forbearance options.

Mixed results have been seen as there have been some homeowners who were granted forbearance but only delayed the inevitable loss of their home due to their inability to find an employment position which would allow them the income to either continue making traditional mortgage payments or qualify for a modification. While there was some homeowners who were able to use their period of forbearance to find an employment opportunity and were then able to qualify for a home loan modification, some homeowners have simply found themselves in a position where they can no longer afford their monthly mortgage payment.

In these cases, where federal or proprietary home loan modifications are unavailable or unhelpful, unemployed homeowners may be able to participate in foreclosure alternatives programs which allow homeowners to surrender or sell their home and essentially be forgiven of their remaining mortgage debt. Short sale options, which have typically been used by homeowners in an underwater mortgage situation, and deed in lieu of foreclosure plans may be available to homeowners who have shown a previous ability to make the mortgage payment but, due to factors like unemployment, are simply unable to continue making home loan payments.

Homeowners who qualify for these deed in lieu of foreclosure plans or short sales will typically will either surrender their deed or sell their home and this is seen as satisfaction of the total amount remaining on their home loan. While there are forbearance opportunities still available to homeowners, individuals who are struggling to make their mortgage payment may want to speak with their lender or a certified housing counselor early before problems get out of hand as this could create problems when it comes to qualifying for a forbearance opportunity or foreclosure alternatives plan.