Emergency Foreclosure Help for People That Are Unemployed
The U.S. Department of Housing and Urban Development, or HUD, in partnership with local governments, created several options for distressed homeowners who have become unemployed. To qualify for these programs, the homeowner must be able to demonstrate a financial hardship. The homeowner must work in cooperation with his mortgage servicer to obtain government help. HUD also provides housing counselors for homeowners facing foreclosure. The Making Home Affordable website (see Resources) provides information on additional foreclosure-prevention options.
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Home Affordable Unemployment Program
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The Home Affordable Unemployment Program, or UP, helps homeowners who have lost a job obtain a forbearance on mortgage payments. A UP forbearance temporarily suspends or reduces the monthly payments. The homeowner can receive a three-month forbearance on payments, which can be extended. During the forbearance period, mortgage payments will be reduced to 31 percent of the household's total income. The homeowner may be required to be receiving unemployment benefits during the forbearance period to qualify for a forbearance. Also, the unpaid principal balance of the loan cannot exceed $729,750 for a homeowner to be eligible for UP help.
Hardest Hit Fund
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President Barack Obama created the Hardest Hit Fund to help states that have had the most foreclosure activity during the housing market downturn that began in 2007. Homeowners who have become unemployed or experienced a decrease in income may be eligible to apply for help with the local housing finance agency. During the homeowner's period of unemployment, a monthly benefit is provided to be used toward the mortgage payment. The homeowner must meet income level requirements to be eligible to receive assistance. Help is available on a first-come first-served basis, until funding runs out. As of January 2011, most agencies are in the beginning stage of accepting applications.
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Emergency Homeowner's Loan Program
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Funding for the Emergency Homeowner's Loan Program was provided to the states that did not receive Hardest Hit funds. The program provides a zero-interest deferred loan of up to $50,000 to homeowners who have experienced a decrease in income. Financial assistance can be received for up to 24 months. Homeowners must have a history of timely payments prior to the loss in income. The homeowner must also be three months delinquent on mortgage payments. The home must be the owner's primary place of residence.
HOPE Hotline
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The Homeownership Preservation Foundation has set up a 24-hour hotline that helps homeowners facing foreclosure determine the best plan of action for their financial situation. Housing counselors can help determine which foreclosure-prevention program the homeowner is eligible for. The counselor can also advocate on the homeowner's behalf when speaking with the mortgage servicer to obtain a loan modification or temporary forbearance. Foreclosure-prevention counseling is provided at no cost to distressed homeowners.
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References
Resources
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