subject: How to Get Mortgage Assistance When Unemployed [print this page] How to Get Mortgage Assistance When Unemployed
The latest attempt to rescue the US from an unprecedented housing crisis is set to be implemented.State housing finance agencies across the nation were challenged be the Obama Administration to propose innovative programs to assist those having trouble making their mortgage payments.
The funds for these state government mortgage assistance programs will come from theHousing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, established in February 2010. The federal fund was just one of the many housing recovery programs established to stimulate economic recovery. This particular fund was created help homeowners in states with the sharpest decline in housing prices (over 20%) and unemployment rates exceeding 12%.
The goal of the fund and the state programs are to rescue homeowners from certain foreclosure because of unemployment, underemployment, or medical crisis.
The US Treasury has already approved housing finance agency programs in Arizona ($125.1 million), California ($699.6 million), Florida ($418 million), Michigan ($154.5 million), and Nevada ($120.8 million). Additional programs are expected to be approved in North Carolina ($159 million), Ohio ($172 million), Oregon ($88 million), Rhode Island ($43 million), and South Carolina ($138 million).
As an example of the type of mortgage assistance provided in these approved programs' we'll take a look at the first to be implemented, Michigan State Housing Development Authority's (MSHDA) program.
Michigan's Helping Hardest Hit Homeowners plan is structured to provide the following assistance:
Help unemployed borrowers make mortgage payments,
Assist unemployed borrowers or those hit by medical crisis to catch up on missed mortgage payments, and
provide matching dollars to assist homeowners reduce the principal on homes they can no longer afford due toreductionsin income.
Even before implementation some states are asking for more.Michigan's Governor Jennifer Granholm stated, in her recent announcement of the new mortgage assistance, that she will be asking the Obama Administration to also consider expanding the program to "Michigan's long-term unemployed whose benefits have expired."
The big caveat in all of these government home loan assistance programs is the need for servicer participation. There's no requirement for any of these mortgage servicers to participate or even assist these borrowers headed for foreclosure.
Mortgage servicers are the mortgage lenders and specialty companies that actually manage these mortgages. There job is to collect payments, manage escrow, and make adjustments and modifications to these loans on behalf of investors that own the home loans in packaged into mortgage-backed securities.
Homeowners currently receiving unemployment compensation, have experienced unexpected medical expenses, or have had a significant reduction in income should contact their mortgage servicing agency immediately. Use the contact information typically available on your mortgage payment statement and ask about available government assistance.
Like a loan modification this process is likely to be tedious and frustrating, but good consistent effort may bring some mortgage relief.
