September 29, 2020

Mortgage Grace Period For Unemployed Homeowners

“Unemployed homeowners will soon get an extension that will enable them to miss their mortgage payments for up to one full year. The Obama administration will lengthen the grace period from the current time frame of 3 to 4 months, to a full year for those who need additional help to stay in their homes and for those who may be facing foreclosure. This extended grace period only applies to loans obtained from the Federal Housing Administration. This time extension is expected to help tens of thousands of people who are unemployed and are having a difficult time paying their current mortgage and need longer than a few months to get back on their feet.

Officials say that 10,000 unemployed homeowners took advantage of the 3 month grace period within the past year. The reason the FHA is extending the grace period is to try and boost the current foreclosure-prevention program and keep further forclosures from occuring. In 2010, approximately 17,000 troubled homeowners benefitted from the ability to delay their payment that was granted to them by the government. Urban Development Secretary Shaun Donovan hopes this move will compel Fannie Mae and Freddie Mac to follow suit and make the time allowance extension as well. The two government controlled mortgage companies currently back approximately 90 percent of newly obtained mortgages. Freddie Mac and Fannie Mae had no reply as to whether or not they will join the FHA in this endeavor, but come October 1, new rules will apply to the mortgage giants. Rules will be put into effect that will make allowances for long term help for disabled people and people who suffer from long term illness. If a homeowner dies and their property is put into probate, the mortgage payment on the property of the deceased can be delayed for up to one full year.

Trial modifications were allowed for over 1.6 million people who have experienced trouble paying their home mortgage to keep them from facing forclosure and losing their home, but the program has lost approximately 800,000 participants who have permanently dropped out of the governmental run assistance programs permanently. In 2009, the government’s main foreclosure program was created to ensure that at risk people at least had an opportunity to avoid home forclosure. The program’s extension will benefit many who have found themselves unemployed and will give them more time to find work. Hopefully, this will enable them to make their payments, avoid becoming homeless and adding to the already crippling home foreclosure rate.”

San Francisco Chronicle

Jobless homeowners could get mortgage reprieve

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