Digital News Report – The U.S. government created the Making Home Affordable Program to help struggling homeowners keep their home. During this economic downturn the number of foreclosures has spiked and the HAMP program was designed to slow home-loss down.
By August 1st (today) servicers were to offer “extra help” to unemployed homeowners. This program offers Americans a forbearance period of at least three months, giving the homeowner time to find new employment.
Unemployment benefits do not count as income under the government mortgage modification program.
If the homeowner loses their job again during the forbearance period they may or may not get it extended, depending on the loan holder (investor/bank).
Once the homeowner finds a job the forbearance period ends and they are evaluated under the government loan modification program.
Here are some of the Loan Modification Program Requirements:
1) Loan must be a First Lien
2) Loan must have originated before January 1 2009
3) Homeowner must reside at location
4) Homeowners need to be behind on their payments but not longer than 3 consecutive months.
5) The total payment, including property taxes and insurance, must be more than 31 percent of the homeowner’s gross income.
6) If the payment is less than 31 percent of the income, it is up to the “discretion” of the servicer.
By: Tina Brown