Homeowners who are unemployed have had limited options when it comes to finding affordability in their monthly mortgage payment but alternative assistance plans outside of the federal Home Affordable Unemployment Program may offer options from state-specific initiatives to assist homeowners who are jobless and attempting to avoid foreclosure. Understandably, homeowners who have lost their job have had options to either modify their mortgage or participate in the Unemployment Program, but there have been complications related to these plans that have stopped homeowners from successfully acquiring the foreclosure prevention aid they need.
Obviously, homeowners who are unemployed and are only receiving unemployment benefits as their main source of income cannot count these benefits as income and are therefore disqualified from receiving a home loan modification from the federal Making Home Affordable Program. Early last year, homeowners who claimed unemployment benefits may have been able to acquire a trial modification plan or even a more permanent home loan modification, but as unemployment benefits expired and long-term unemployed homeowners were without income entirely, defaults became problematic within the modification program and required additional plans to assist these men and women without a job.
While high levels of unemployment have led to a great number of foreclosures across the nation, the Unemployment Program within the Making Home Affordable initiative has led to homeowners being either offered more affordable payments on their home loan from month-to-month or being able to participate in a forbearance program as well. Obviously, some homeowners who were able to forgo making their mortgage payment for a set period of time greatly benefited from this Unemployment Program, but after the forbearance program ended, many homeowners were simply back to where they started and faced foreclosure again.
Yet, state-specific programs like the Hardest Hit Fund and the Department of Housing and Urban Development’s Emergency Homeowner Loan Program are hoped to provide funding in 2011 for homeowners through these state-specific plans or HUDs unemployment assistance initiatives to bring about more stability for homeowners who are temporarily suffering from the loss of their employment. Understandably, homeowners who can qualify for these unemployment assistance plans may stand a better option at avoiding foreclosure as some of these unemployment assistance initiatives could help meet homeowner mortgage payment costs for up to two years.
Typically, these funds are set aside for homeowners who have a good chance at finding stable employment in the near future, as many long-term unemployed homeowners may finally be seeing a light at the end of the tunnel when it comes to their job search endeavors. However, programs like the Unemployment Program which offers a minimum of three months forbearance for a homeowner on their mortgage payment may simply not help as well as the more long-term unemployment solution plans which could, again, help homeowners for up to a year or more. While the Unemployment Program is still available and has been beneficial for some, homeowners have also seen these options from state-specific plans arise that could help in areas where financial distress related to unemployment has been particularly felt and foreclosures on a more dramatic scale could be seen if these preventative measures are not taken.