By now there are homeowners who are unemployed but may have heard about forbearance opportunities available as part of an extension within the Making Home Affordable Unemployment Program, which may allow for a longer period of forbearance for homeowners who are without a job but have not fallen into a great deal of mortgage delinquency as a result of their inability to make their home loan payments. Yet, there may be some misconceptions that homeowners need to be aware of related to this particular unemployment program as it is not necessarily a guaranteed solution to an unemployed homeowner’s dilemma.
There are homeowners who may currently be in the Unemployment Program plan who after they have completed a set time in the forbearance period may be considered for an extension that will allow them to take advantage of this unemployment assistance program for a minimum of 12 months. Yet, what homeowners have felt in some cases is that after they complete their time in this Unemployment Program, they may be offered a home loan modification plan as result due to the fact that homeowners who are unemployed and do not have a stable source of income are typically not good candidates for the federal modification program.
Since unemployment income is seen to be unstable and even if a modification were granted it would not guarantee that a homeowner could continue to make their payments, but the Unemployment Program is hoped to aid homeowners through allowing them to receive this forbearance option for a year, which may allow them time to find an employment opportunity and either begin to meet their home loan payment requirement or qualify for a modification. However, homeowners are not guaranteed a home loan modification if they are allowed into the Unemployment Program, and this option is not required of servicers who are dealing with homeowners who may have lost their job previously.
Yet, servicers are pressed to always consider homeowners for specific programs, as homeowners can’t simply face foreclosure without being considered for some of these loss mitigation plans, so just because there are no guarantees for unemployed homeowners through these programs doesn’t mean that they are not available and are not being used at the present time. In fact, some servicers are finding that it’s difficult to foreclose on a home and then sell that property in some areas since homebuyers remain scarce and as a result banks are simply holding onto properties that are beginning to compile in the housing market.
Many of these financial institutions are unwilling to continually add to their backlog of homes they are trying to sell, so if a homeowner who is unemployed does make a request for this Unemployment Program, they typically will be considered but again there are no guarantees that a servicer must offer this particular program to homeowner. Yet, homeowners may need to remember that there are also unemployment assistance plans available through the Hardest Hit Fund and programs like the Emergency Homeowners’ Loan Program, which may also aid those who are unemployed with the foreclosure prevention assistance they need.