Aid for unemployed homeowners boosted by Obama administration
Mortgage servicers for loans backed by the Federal Housing Administration will be required to extend so-called forbearance on mortgage payments for 12 months -- triple the current requirement of four months -- for borrowers who qualify for the assistance. The Obama administration also is making it easier for homeowners to qualify.
In addition, mortgage servicers participating in the administration's Making Home Affordable program will be required to extend forbearance for unemployed homeowners for the same period "wherever possible under regulator and investor guidelines," the White House said. The major mortgage servicers all are participants in that program.
"The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” said Housing and Urban Development Secretary Shaun Donovan. “Today, 60% of the unemployed have been out of work for more than three months and 45% have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.”
President Obama said Wednesday that the administration has been working to find new ways to reduce foreclosures with unemployment still high at 9.1%, noting that the housing market continues "to be a big drag on the economy. "
"We’ve had to revamp our housing program several times to try to help people stay in their homes and try to start lifting home values up," Obama said in response to a question on Twitter. "But of all the things we’ve done, that’s probably been the area that’s been most stubborn to us trying to solve the problem."
-- Jim Puzzanghera
Photo: A "no trespassing" sign on a house in Los Angeles in May. Credit: Associated Press.