The administration released the details of their new Temporary Assistance for Unemployed Borrowers last week. Here are the highlights.
The Program is Still Optional
They added and changed a lot of stuff in HAMP last week (as we reported a couple weeks ago), but one thing they haven’t changed is the program is still optional for lenders. If your lender doesn’t participate, there’s not much you can do about it, but most of the country’s largest lenders, servicers, and investors have signed on.
The Details
The program requires servicers to provide a minimum of 3 months, and up to six months for
some borrowers, of temporary forbearance for eligible unemployed borrowers, during which
their payments will be reduced to no more than 31 percent of their monthly income. After the
forbearance period, you will be evaluated for a HAMP modification if your mortgage payment is more than 31 percent of your monthly income and meet other income documentation and property eligibility requirements.
The temporary assistance will enable unemployed homeowners to remain in their homes as you look for work
If the forbearance period ends and you still don’t have a job, you may be considered for a HAMP
program supporting alternatives to foreclosure including short-sales.
Servicers participating in HAMP will be required to offer assistance to all unemployed
borrowers who meet these eligibility criteria:
- Homeowner’s mortgage meets HAMP eligibility requirements, including that the house
is owner-occupied and the loan balance is below $729,000. - Borrower submits evidence that they are receiving unemployment insurance (UI)
benefits. - Borrower must request temporary assistance in the first 90 days of delinquency.
When Will the Program Be Ready?
They expect all the new programs to be fully implemented by Fall but many servicers and investors have programs in place already. So the bottom line is…call and ask!
Being accepted into the forbearance program does not mean you will necessarily be accepted into a HAMP modification after the forbearance period.
Where Can I Get More Information?
- The new Making Home Affordable Consumer FAQ
- The HAMP Improvement Fact Sheet
- The HAMP Improvement Example Sheet (very instructive and helpful!)
- Sign up for Truth in Foreclosure updates below
Leave a Reply
You must be logged in to post a comment.