Real NEWS | Extended Unemployment Forbearance for FHA Loans

If you’re unemployed, with a FHA-backed loan—this is probably welcome news.  The Obama Administration announced that they are requiring Servicers to extend the minimum period of forbearance from 3 months to a full year.  As expressed by U.S. Housing and Urban Development Secretary Shaun Donovan, the change was prompted because, “the current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers.  Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.”

Another juicy bit from the HUD’s blog, so cleverly titled, The HUDdle (well done, Name Chooser):

“At the end of the forbearance period, the lender will review your financial situation again to determine what option might fit your circumstances like a loan modification or repayment plan. The extended forbearance period begins August 1st with another 60 days for lenders to implement.”

And P/S, if you don’t have a FHA-backed loan…

“The Obama Administration also intends to require lenders participating in the Making Home Affordable Program (MHA) to extend the minimum forbearance period to 12 months wherever possible under regulator and investor guidelines.”