Tag Archives: unemployed borrowers

Real Estate

Unemployed Borrowers Get Reprieve On Their Mortgages

Fannie Mae and Freddie Mac recently extended their foreclosure forbearance programs to give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.

Making sense of the story

  • In a forbearance program, a lender agrees not to foreclose on a property and gives the borrower several months’ grace from or reduction in monthly mortgage payments.  The programs work best for temporary setbacks, like job loss, health problems, or natural disasters.
  • There are drawbacks to the forbearances though. The most-significant drawback is a larger total debt from the smaller payments.  The unpaid balance continues to increase during this time.
  • The new temporary mortgage payment is often set to 31 percent of the household income; in some cases lenders agree to accept no payments.  Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring approval by both Fannie Mae and the lender.
  • However, even with the program in place, the lender could still report a mortgage as delinquent, which could adversely affect the borrower’s credit score.
  • Because some agreements add onerous term and conditions, homeowners should also consult with a housing counselor certified by the Dept. of Housing and Urban Development.

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Real Estate

Mortage Aid Open To More California Borrowers

 

Image by Casey Serin via Flickr
Image by Casey Serin via Flickr

The state-run program, “Keep Your Home California,” which helps homeowners struggling to pay their mortgages now has broader eligibility guidelines.  Borrowers who did “cash-out” refinances and own multiple properties now are eligible for the program, according to California Housnig Finance Agency officials.

  • To date, Keep Your Home California has helped approximately 8,000 low- and moderate-income households that are behind on loan payments or close to default.
  • There are four parts to the program: Mortgage help for the unemployed, mortgage aid for homeowners with documented financial hardship, relocation help for those in the midst of a short sale or deed-in-lieu of foreclosure, and reduction of principal.
  • Homeowners who completed “cash-out” mortgage refinancing now are allowed to take part in the four programs outlined above, and borrowers who own more than one property also can apply for the program.  Previously, these two groups of borrowers were excluded from participation.
  • Mortgage aid to unemployed borrowers also has been extended to nine months, instead of six.  Such homeowners can receive up to $3,000 a month.  To qualify, borrowers must be receiving unemployment benefits.
  • Additionally, the program has reinstated up to $20,000 in past-due mortgage payments instead of the previous $15,000 cap.
  • To review qualification guidelines, visit www.KeepYourHomeCalifornia.org or www.ConservaTuCasaCalifornia.org.

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For all your real estate needs:
Call or email
John J. O’Dell Realtor® GRI
Real Estate Broker
(530) 263-1091
Email jodell@nevadacounty.com

DRE #00669941

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Real Estate

42,000 of California Jobless will Get Help with Mortgages

The U.S. Treasury Dept. announced yesterday it is providing additional funding to a California program to help homeowners struggling to make their mortgage payments due to unemployment.  The program, administered through the California Housing Finance Agency (CalHFA) will assist struggling borrowers make up to six months of mortgage payments.  Lenders will be asked to match the government contribution.

  • The program aims to help 19,000 unemployed borrowers in California between its November launch and next July.  An additional 23,000 borrowers will receive help over the next two years, according to CalHFA estimates.
  • To qualify for the program, borrowers must be unemployed and eligible for unemployment benefits, and live in the home tied to the mortgage.  Borrowers must be fewer than 90 days behind on mortgage payments and meet low- and moderate-income guidelines.  Income requirements can be found at http://keepyourhomecalifornia.com/income.pdf.
  • CalHFA is focusing on providing aid to unemployed borrowers struggling with purchase loans, excluding refinanced loans.  According to CalHFA officials, it is too difficult to decide who “cashed out for a good reason and who didn’t.”
  • More information about the CalHFA program, including eligibility, program summary, income requirements, and frequently asked questions, can be found at http://keepyourhomecalifornia.com.

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