The biggest concern for all those who are unemployed is the impending foreclosure. Majority of foreclosures in the market is due to unemployment. The situation is getting worse as more and more homes in the US are now being foreclosed and there are thousands of distressed properties on the market. Millions of people are now looking for alternatives to foreclosure.
Instead of losing all hope, homeowners should try to get employed again to become eligible for assistance from the government as it has now come out with a mortgage help for people. This will help them in preventing foreclosure or short sale. The mortgage help program launched in 2010 is aimed at reducing debt owned by individuals in financial distress. This mortgage help program is geared towards encouraging various lenders to work closely with the borrowers to ease their mortgage burden instead of choosing the foreclosure route.
Debt Relief for Struggling Unemployed Homeowners
The “Making Home Affordable Program” of the government has been developed for distressed homeowners. As majority of lenders have been implementing stringent lender standards and rules, the mortgage help program will now encourage them to be more sympathetic and open towards restructuring the borrowers’ loan instead of foreclosing the debt.
However, this program is not for everybody. There is an eligibility criterion that should be fulfilled for before one becomes eligible for this program. One criterion is loan payment to the income ratio of the borrower. If borrower is paying more than 37% of his income to repay the loan, then he is eligible for the mortgage help plan.
Another important criterion is about the hardship of the person. This includes death, or loss of job of the sole bread winner. Another eligibility condition is the drop in the value of the house to a level that total debt is more than the value of the house. The mortgage plan also insists that home owner’s primary address in the mortgage and the mortgaged house should have existed prior to 2009.
The mortgage help program is open to all who’ve been recently unemployed, but are now on job. The ultimate goal is to bring down the payment of borrower to the level that is commensurate to his or her monthly income. First, the interest rate of the debt is adjusted, and if it does not work then borrower can request the restructuring of loan. Under another option available to the lender is to reduce the principal amount.
Actually, there are different plans under this government’s mortgage help plan. This includes Home Affordable Refinance Plan, Payment Reduction Plan, and Home Affordable Modification Plan. The plan chosen by the homeowner depends on the extent of debts. If you are interested in this program, you will have to submit a letter of proposal for the relief grant. This letter should itemize the amount of payment that you can make and amount of your debt. Once it is approved, the government can opt to either issue a check to the borrower, or directly pay to the lender.
The mortgage help plan of the government is thus a ray of hope for all homeowners who are at the brink of losing their house.