FHA gives jobless homeowners one-year break
MSNBC
Beginning
Aug. 1, the Federal Housing Administration will extend the period for
unemployed homeowners to miss mortgage payments from four months to a
full year, providing qualified homeowners with more time to find
employment before the foreclosure process begins.
Making sense of the story
- The new Special Forbearance program falls under the FHA’s Loss
Mitigation program, which FHA-approved servicers must participate in.
- The extended grace period only applies to FHA-backed loans and
homeowners in the government’s foreclosure prevention program, the
Making Home Affordable Program (MHA).
- In addition to extending the forbearance period and removing the
up-front hurdles for borrowers, the FHA also reemphasized its
requirement that participating servicers conduct a review at the end of
the forbearance period to evaluate the borrower for all additional,
applicable foreclosure assistance programs and notify the borrower in
writing whether or not he/she qualifies for any other available option.
- If the borrower does not qualify for any foreclosure assistance
option, the servicer must provide the borrower with the reason for
denial and allow the borrower at least seven calendar days to submit
additional information that may impact the servicer’s evaluation.
- Housing and Urban Development, which oversees FHA, hopes private
lenders and government-controlled Fannie Mae and Freddie Mac will adopt a
similar policy.
- For additional information on the program, including eligibility and requirements, please visit www.makinghomeaffordable.gov.
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