As mortgage payment difficulties remain in place for homeowners, and levels of unemployment remained quite high nationally and in some states, where we are seeing double-digit numbers, unemployment options that homeowners have on home loan payments still remain beneficial for those who qualify, as homeowners may get help through options that allow them to forgo paying their payment on a mortgage for up to a year, in some programs. Obviously, when it comes to the federal homeowner unemployment forbearance program homeowners are able to benefit by receiving either a reduced payment or forbearance option that will be available for at least one year, and allow those who are struggling with long-term unemployment to avoid foreclosure as a result.
The aspects of this federal Home Affordable Unemployment Program had originally allow homeowners three months worth of forbearance on their home loan payment, but due to extended levels of unemployment where some states are seeing the unemployment rate reached levels as high as 13%, homeowners who are in a position to potentially stay afloat with certain types of assistance have been granted an extension whereby this program will allow them forbearance for one year. Obviously though, it comes down to homeowners qualifying for this particular option with their mortgage servicer, which has not always been a happy relationship between homeowners and their bank, especially when it comes to mortgage assistance plans from federal programs.
Yet, in states that have been particularly troubled by unemployment, homeowners are being urged to explore options with their state housing agencies, with which many major financial institutions are working, in the hopes of qualifying for certain types of programs that will help homeowners who are without a job. Not all states who have been participating in the Hardest Hit Fund may offer unemployment assistance, but there are many who can either offer programs that will make payments for a homeowner or offer dischargeable loans, which is similar to a program we saw months ago that allowed homeowners to take advantage of these loan opportunities that would be forgiven if certain conditions were met.
Understandably, homeowners who are relying on unemployment benefit insurance are not going to be able to meet their mortgage payment in full, or in some cases even a modified home loan modification payment will not help those who are struggling financially. However, if the cause of troubles in the job market that have led some to question whether recovery will be much longer than originally expected, that these unemployment assistance plans are being offered to those in need. Homeowners are being urged to look into these particular options be it with a mortgage servicer or state housing agency, as some have simply pursued options like a modification, been denied, and either resigned themselves to bankruptcy or foreclosure, but there are homeowners who have also bypassed these opportunities and participated in short sale programs also.
It should be kept in mind that homeowners are not guaranteed to keep their home as a result of these unemployment assistance programs, but there are homeowners seeing benefits and finding themselves in a financial position where, even when unemployment is a problem, they can keep their home at either a drastically reduced payment or even during a period of forbearance while they look for a more stable employment opportunity and hopefully will return to a level of income that allows them to pay their mortgage.