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After a slow start, Bank of America is embracing the federal government’s Home Affordable Unemployment Program and expanding the program to all regions qualifying for the federal Hardest Hit Fund. This extra help for unemployed workers could not come at a better time. Currently in the United States there are 13.7 million unemployed workers, according to statistics provided by the Labor Department. Unemployed workers are a specially vulnerable demographic among home owners who are at risk of foreclosure.
The Hardest Hit Program
In February 2010, the federal government allocated $7.6 billion towards helping states and regions which had been particularly hard hit by the real estate crash and the economic recession. These areas include, Florida, California, Michigan, Alabama, Arizona, Illinois, Georgia, Indiana, Kentucky, Nevada, Mississippi, New Jersey, North Carolina, Ohio, Oregon, South Carolina, Rhode Island, Washington, DC and Tennessee.
Despite some promising figures in the last week of April (some 400,000 new jobs), there are still nearly 8 million workers who are on some kind of unemployment benefits. Until the unemployment issue improves it is difficult to see a long term solution to the foreclosure. In an effort to manage the increase in foreclosures among unemployed workers, banks such as BofA and Ally Financial are opening their unemployment mortgage assistance programs under the Government Home Affordable Unemployment Program to the areas that need it the most.
The Home Affordable Unemployment Program
The purpose of the Home Affordable Unemployment Program is to provide unemployed workers with time to find a job and reorganize their finances so they can afford their mortgage payments. The minimum period during which mortgage payments are suspended in this program is three months. During those three months, sometimes more, unemployed workers do not have to pay their mortgage and can concentrate their resources in finding a job. If you do find a job while in the program, you will be considered for HAMP, the Home Affordable Modification Program, which is designed to reduce your mortgage payments to 31 percent of your monthly income before tax.
If you do not find a job a month before your unemployment mortgage assistance program ends you will also be considered for HAMP. If you are not accepted, BofA, or whatever bank you are using, will determine your eligibility for other mortgage assistance programs.
Notice however that this program does not “forgive” mortgage payments during the three-month period. It simply suspends payments temporarily. These payments must be refunded once the program ends. There are two main ways to repay them: either by a single one-time payment or by increasing monthly mortgage payments until the debt is repaid.
Are you interested in this program? Why not contact BofA and see if you qualify under the expanded program.
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