Help Is on the Horizon for Unemployed Homeowners

Help Is on the Horizon for Unemployed Homeowners By Ilyce Glink

Despite government efforts to stimulate the economy, many homeowners are facing the one-two punch of unemployment and looming mortgage payments. As of the beginning of July 2011, the official unemployment rate still hovered around 9.2 percent (with the U-6, the most complete measure of unemployment and underemployment reaching as high as 16.2 percent), forcing many more Americans to fall behind on mortgage payments.

The Home Affordable Unemployment Program (UP), introduced by the Treasury Department last August, is designed to help exactly these homeowners who are both unemployed and behind on their mortgages. When it launched, the program offered homeowners a three-month forbearance on their payments. But in response to persistently high unemployment numbers (nearly half of those who are jobless have been unemployed for 6 month or more), the Treasury Department announced last week that it would extend the forbearance period to 12 months.

So who qualifies, and which mortgage providers are participating?

If you meet the following criteria, you may be able to claim the forbearance period:

You are unemployed and eligible for unemployment benefits.
You occupy the house as your primary residence.
You make your request for help before you’ve missed three mortgage payments.
You have not previously received assistance from UP or from the Home Affordable Modification Program (HAMP).
You obtained your mortgage on or before January 1, 2009.

The website notes that these criteria are for “guidance only,” and the only way to be sure whether or not you qualify is to contact a HUD-certified housing counselor at 888-995-HOPE or by visiting HUD.gov.

The good news, according to Andrea Risotto, a public affairs officer at the Treasury, is that about 120 mortgage providers will voluntarily participate in the Treasury’s unemployment program. If you have an FHA loan, your lender will automatically participate, but the same can’t be said for those with VA loans. Furthermore, if you’ve already enrolled in a forbearance program, your lender is now required to extend that forbearance period from three months to one year.

To find out whether your specific mortgage lender is participating in the unemployment program, visit http://www.makinghomeaffordable.gov/get-assistance/contact-mortgage/Pages/default.aspx or call the Homeowner’s HOPE Hotline at 888-995-HOPE.

While UP is a life preserver for unemployed homeowners who are trying to save their homes from foreclosure, job creation will be the only long-term solution to our country’s homeowner headaches.

Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate atThinkGlink.com and at the Home Equity blog for CBS MoneyWatch.