Unemployed Homeowner Assistance And Aid For Negative Equity–Federal And State Plans To Address Foreclosure Prevention Needs

Unemployed homeowner assistance for individuals who have recently lost their job and are collecting unemployment, as well as, aid for homeowners in a negative equity situation are two of the more common issues that homeowners are researching to help them avoid foreclosure as a result of continuing economic and personal financial problems that many are facing in various states across the nation. Yet, there are both federal and state plans that may be beneficial for homeowners when it comes to addressing their needs that have arisen as a result of either seeing cutbacks in their wages and subsequent hardships, as well as, difficulties in their mortgage payment obligation that have arisen due to a decrease in their property’s value.

Unemployment is still an issue that many homeowners face and, as a result, there are both federal and state programs that have been implemented as a way to address these issues. One of the more common forms of aid from the federal HAMP plan is the Home Affordable Unemployment Program, which can offer homeowners at least three months of forbearance on their home loan payment, which could be extended once a servicer reviews a homeowner’s situation after this period has ended. Yet, homeowners may also get a reduction in their mortgage payment through the Unemployment Program, as some homeowners who are living off of unemployment benefits as their only income cannot claim this as true income when applying for a federal modification plan.

However, when it comes to states that offer assistance to unemployed homeowners, areas that are participating in the Hardest Hit Fund have been able to offer homeowners different options for a varying period of time, depending on the state and program, which have essentially made a homeowner’s mortgage payment while they are out of work. These options are, again, offered through state-specific plans that can be useful for homeowners in a situation where a homeowner may be able to prevent the loss of their home with assistance but would otherwise face foreclosure without this form of intervention and aid. Simply put homeowners who are in a predicament as a result of unemployment but may also be in a situation where a foreclosure is preventable could stand a chance at getting funds from these various plans in states that were particularly hard hit by unemployment.

While, again, homeowners will have to speak with their state’s housing agency to see if these plans are available in their area or consult their mortgage servicer, some homeowners are simply facing an underwater home loan situation that they need addressed so that they can avoid the loss of their home. Due to having certain types of home loans, like an adjustable rate mortgage option, homeowners who have seen negative equity in their mortgage have been seeking principal reduction assistance in the hopes of offsetting the negative effects that have been seen due to the devaluation of property in many areas, but there are some difficulties that have arisen in these cases. HAMP offers the Principal Reduction Alternatives program and many of the states that are participating in the Hardest Hit Fund plan may also be able to help homeowners find principal forgiveness, but there are some banks who are unwilling to reduce a homeowner’s principle if they can continue to meet their home loan payment.

These programs which are, again, available from both federal and state initiatives, can be beneficial in giving homeowners foreclosure prevention aid when they need an alternative to more traditional home loan foreclosure prevention options, like modifications. These plans are not available for every homeowner even in states where they are being implemented, however, homeowners who are suffering due to negative equity or may have recently become unemployed have been prompted to talk with their servicer or state housing agency to inquire about these plans so that they may find assistance before their financial situation becomes too problematic and they start missing payments on their home loan.