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It sounds impossible and almost a little too good to be true. Starting July 1, 2001, the Federal Government has started the Home Affordable Unemployment Program, which will allow you to reduce and even suspend payments on your mortgage if you have recently lost you job. The program can help you not fall behind on your payments and even avoid foreclosure. Here is how it works:
Your mortgage has to be the first lien on your home, meaning you can't just do this to your HELOC or second mortgage.
This has to be your primary residence. If you have investment properties or it is a second home, you can forget about it.
You have to be on unemployment. This is how they determine if you are really out of a job or not.
The servicer has the choice of either reducing your payment to 31% of your total income (what you are getting from unemployment) or suspend payments. The decrease in payments will continue until you find employment.
The great news about this program is the servicer cannot begin foreclosure proceedings or conduct a foreclosure sale while you are in this program.
You need to call your servicer, or the company you send your payments to. Once you complete the paperwork with them, they have 10 days to notify you if you qualify for the program