New Government Initiative To Provide Aid To Jobless Homeowners

A new government initiative targeting unemployed homeowners facing default debuted in July, just as the unemployment rate took a slight dip. Under the Home Affordable Unemployment Program, eligible homeowners who aren't being served by HAMP will get some temporary mortgage  relief, with an opportunity to be considered for HAMP once they meet certain criteria.

Starting July 1, homeowners can apply for assistance from the Home Affordable Unemployment Program (HAUP).

HAUP provides homeowners a forbearance of monthly mortgage payments, either reducing them or suspending them for at least three months. Servicers can extend the timeline depending on regulatory guidelines.

In June, the unemployment rate edged down to 9.5% from 9.7% in May, according the Department of Labor.


Homeowners who qualify for the program have a first-lien  mortgage originated on or before Jan. 1, 2009. The unpaid principal balance on a single-unit primary residence must be equal to or less than $729,750, and the mortgage has to be in default or in imminent default.

Those who have already gone through the Home Affordable Modification Program (HAMP) process are not eligible for the HAUP. HAMP requires borrowers to be employed with some income for the modification to be reduced down to 31% of the monthly income.

But once the borrower finds another job or the borrower is 30 days from the end of the HAUP forbearance period, the borrower can be revaluated for a HAMP modification.


HUAP joins the Home Affordable Foreclosure  Alternatives (HAFA) program, which provides incentives to servicers for providing short sales and deeds-in-lieu of foreclosure, as another net to catch borrowers who fall out or fail the HAMP program.

Written by Jon Prior/NU Wire Investor