New Loan Modification for the Unemployed

I have good news for some you who have experienced a job loss and are behind on your mortgage payments or soon will be.

As part of the new Home Affordable Modification Program (HAMP), that the government released April 5, 2010, they are now adding another arm called The Home Affordable Unemployment Program (UP). It is a supplemental program to the Home Affordable Modification Program (HAMP) which provides assistance to unemployed borrowers. The Unemployment Program grants qualified unemployed borrowers a forbearance period which reduces or suspends their monthly mortgage payment.

The program is effective for participating HAMP servicers on July 1, 2010, however servicers may begin to offer UP earlier. This program is for conventional loans only, government loans such as FHA are not included at the time of this writing. Servicers are required to offer UP when the following criteria is met: 

• Loan is a first lien mortgage, originated on or before January 1, 2009, secured by a one- to four unit property, one unit of which is the borrower’s principal residence and the unpaid principal balance (UPB) is equal to or less than $729,750 on one unit properties.
• Loan has not been previously modified under HAMP and the borrower has not previously received a UP forbearance period.
• Borrower is unemployed at the date of the request for UP and is able to document that they will receive unemployment benefits or have been receiving unemployment benefits at commencement of the forbearance plan.
• Servicers have the discretion whether or not to require a borrower to have received.
• unemployment benefits for up to three months before commencement of the forbearance plan.
• Borrower is either delinquent but has not missed more than three consecutive monthly payments or default is reasonably foreseeable.
• It is at the servicer’s discretion whether to offer UP if a borrower’s total monthly mortgage payment is less than 31 percent of the borrower’s monthly gross income.

For more information about this or about Short Sale options contact Mary Beth Harrison at 214-365-6500. You can also visit www.avoidforeclosureaid.com.