Numerous unemployed homeowners have had a great deal of difficulty when it comes to not only finding an affordable solution to their home loan payment requirements, but as long-term unemployment and high levels of unemployment continue, there are more homeowners who are looking for ways to keep their homes while they continue to look for work or an opportunity that may allow them to earn an income which will allow them to once again meet their home loan payment. Yet, some homeowners have been able to find help through programs like the Home Affordable Unemployment Program, which has been offered as a way to help homeowners for a minimum of 12 months by offering either a forbearance or reduced payment plan.
Early in the home loan modification program’s life, homeowners who were unemployed may have been able to qualify for a modification, which reduced mortgage payments for these individuals, but since men and women in this position were also living off of income from unemployment benefits the sustainability of the modification programs was low in this area. For this reason, homeowners who only had unemployment benefits as their primary source of income began to see these modification options reduced and in turn they were offered assistance from the Treasury’s Unemployment Program.
However, this program initially only allowed homeowners up to three months of forbearance, which may have been fine for some but thanks to continued levels of high unemployment and prolonged joblessness, this extension was recently made should allow homeowners to receive forbearance for at least 12 months. Homeowners need to understand though is that the Unemployment Program may not simply offer a forbearance and could potentially require that some payment be made by the homeowner, but this agreement is worked out so that is affordable and a homeowner will not fall into a precarious situation where foreclosure could potentially be just around the corner.
Yet, the Treasury Department reported that the number of forbearance plans that had been started, as of May this year, numbered at 12,399, with 2,513 of these plans offering homeowners the option where no payment will be required. While some homeowners questioned how they will be able to sustain even a reduced mortgage payment in this unemployment forbearance plan, many servicers do take this into consideration when working with homeowners in this capacity. Obviously, homeowners who are only given a reduced payment within the confines of the modification program may still have too high of an obligation to meet with their current income, so this expansion to the forbearance program is hoped to focus more on an unemployed homeowner needs.
Understandably though, homeowners are not necessarily guaranteed to qualify for this Unemployment Program, but it does need to be considered by those who are unemployed or have seen other financial hardships arise in their life due to no fault of their own. While the jobs reports and unemployment numbers vary from one week to another and on a monthly basis, there are some men and women who are seeing opportunities arise in their area, and for those who are currently still looking, this type of forbearance program could be greatly beneficial while a homeowner continues to look for work that will allow them to get back on their feet financially.