Mortgage Payment Forbearance Still Needed By Unemployed Homeowners–Will Suspending Payments Stop Foreclosure?

Many homeowners argue that there are still improvements that need to be made within the federal home loan modification program due to the fact that the original intent of the program was meant to help homeowners in certain situations, like those who may have had in adjustable-rate mortgage, and not necessarily tailored specifically to help those who are unemployed. However, expansion plans which arose after the establishment of the Making Home Affordable Program did offer some help to homeowners who were without a job, as early unemployed individuals were able to acquire a modification, but when problems arose in this area there were options like forbearance programs set in place as well.

The question of whether modification plans still help homeowners who may be unemployed has arisen due to the fact that long-term unemployed homeowners and men and women who are currently facing unemployment but may have only been out of work for the short-term were only recently able to get a substantial amount of time during which their mortgage payments were suspended. Obviously, when these programs are implemented properly homeowners may stand to benefit from these foreclosure prevention options, but what many homeowners question is whether the opportunities for employment will arise that may allow them to either qualify for modified home loan payments, which would help prevent foreclosure thanks to reduced costs, or what options may be available if homeowners do not find a job at the end of the new forbearance period.

As some homeowners already know, the Home Affordable Unemployment Program recently changed so that homeowners would be given twelve months of mortgage payment forbearance or assistance in cases where homeowners are unemployed and facing foreclosure. Previously, this program is offered to homeowners who may have stood a better chance than some at getting an employment opportunity during this period of forbearance, but with some homeowners facing unemployment that went well beyond these three-month forbearance options, there were those who were unaided by this particular unemployment assistance plan.

It’s hoped though, as we continue on into 2011, that unemployment rates will decrease despite the fact that they have been above 9% for quite some time, with the most recent rate being reported at 9.1%. While forbearance options can be beneficial for homeowners, advisers have often suggested that these men and women also look to state housing agencies for unemployment assistance and inquire as to whether programs like the Hardest Hit Fund may be able to address unemployed homeowner difficulties by offering payment assistance or dischargeable loans that could prevent foreclosure while homeowners continue to look for a stable employment opportunity.