With all the new developments in mortgage assistance, one of the most welcome is a push from President Obama to lessen the amount of mortgage payment if you are unemployed. Here are the details so far for this “unemployment benefit” package for mortgage payments:
Payments will be reduced to only 31% of the borrower’s income. This amount is roughly the same amount as the monthly unemployment insurance benefits. This can be in place for up to six months. Given the right circumstances, lenders can also choose that a borrower will make no payments for that amount of time. This takes into account that unemployment is one of the biggest reasons for payment defaults on mortgage.
There will be more assistance for “underwater” mortgages.The government is now looking at ways to address mortgages worth more than the actual market value of the house. Funding will come from the remaining funds in the $700-billion bailout.
- Banks and lenders will get financial incentives to reduce the principal owed on a mortgage, if it is worth 15% more than the house’s value.
- The government’s cash incentive to lenders for modifying or refinancing second mortgages may be doubled. Modification of second mortgages can lessen the borrower’s total debt, pulling their collective debt back to something that is less than their home’s value.
- The Federal Housing Administration will be given more funds to extend mortgage assistance to people, unemployed or not.
Sign up at the box on the right to get more information on mortgage payment options, refinance actions and assistance, whether or not you’re unemployed.
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