If you’re unemployed and worried about losing your home, here’s some news that might make your day a little brighter. The White House announced earlier today that all FHA-approved mortgage servicers must extend the forbearance period for unemployed homeowners, currently four months, to one year.
Additionally, the servicers have been told to remove upfront hurdles so that unemployed homeowners can qualify with less hassle.
Explains HUD Secretary Shaun Donovan:
The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers… Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.
The FHA is also reminding mortgage servicers that they are required to conduct a review at the end of the forbearance period to evaluate the borrower “for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether or not he/she qualifies for any other available option.”
If the homeowner doesn’t qualify, the servicer is required to provide a reason and allow the borrower at least seven calendar days to submit additional information in support of their application.