Reports in the area of jobless claims for mid-May have stated that decreases are being seen in the number of initial claims, which could point to positive signs in the job market and ultimately lead to more opportunities in the coming months that hopefully will decrease the overall unemployment rate our nation has been seeing. High unemployment has been incredibly stressful for not only young men and women who have recently graduated college but also for homeowners who had previously felt they were secure in their jobs are now facing the prospect of foreclosure due to the fact that they cannot meet their mortgage payment thanks to cutbacks and unemployment. However, there are programs that have been established over the past months to help these unemployed homeowners avoid foreclosure and, hopefully, keep them afloat while new work opportunities are being sought out.
Homeowners who are in a position where unemployment has led to an inability to meet their home loan payment have had to go through numerous strains in their personal financial life but there are also problems which have arisen in the area of foreclosure prevention for these men and women. In the early stages of the federal Making Home Affordable Program, individuals who were living off of unemployment benefits compensation may have been able to acquire a home loan modification, but in many cases this income was simply not enough to meet even a reduced mortgage payment cost that was granted through this program.
Once this was discovered, and in an effort to reduce defaults that were occurring even after modifications were seen, homeowners who were unemployed were no longer allowed to claim their unemployment benefits as income and, as a result, needed new programs to help them avoid foreclosure despite being unemployed.
While the federal Making Home Affordable program currently offers options like the Home Affordable Unemployment Program, which could bring either reduced payments or mortgage forbearance for a set period of time, states are now getting into the foreclosure prevention business as some areas of the nation are experiencing a substantial amount of hardships related to unemployment, while others may be on decent ground.
States that have been particularly affected by unemployment may have seen their particular state’s unemployment rate rise well beyond the national average, and as a result, the Hardest Hit Fund is currently in place in numerous areas across the nation in order to offer either subsidies for homeowners who are unemployed or 0% interest loans that can be forgiven if a homeowner meets certain qualifications. Many of these plans offer assistance for up to a year or as long as two or three years, depending on the severity of unemployment in a particular state, but these options for foreclosure prevention from various state housing agencies are hoped to keep homeowners in their home until employment can be found, as many continue to remain positive and optimistic that the unemployment rate will continue to decrease along with these weekly jobless claims.