Unemployed Homeowners: Advice On Seeking Help

When a mortgage lender approves you for a mortgage loan, the underwriter looks not only at your credit, credit scores, credit history, debt, assets, liabilities, but most importantly, they look at your income and employment history and will only approve you for a residential mortgage loan only if they feel that your employment will likely to continue for many years to come.  Unfortunately, there are cases where a person purchased a home with a new mortgage loan recently but have gotten laid off from their job of terminated.  This is an extremely stressful situation for not just the homeowner, but the mortgage lender as well.  For example, I just closed on a mortgage loan for a client last June, 2013 and my borrower just contacted me that the company he has been with for over 3 years has told him that they were going to terminate his employment because they have lost several major contracts.  This borrower is the sole income provider for his household and has contacted me if there are any options for unemployed homeowners.  The good news is that there is help available for unemployed homeowners and almost all mortgage lenders are eager to help unemployed homeowners in helping them with a mortgage payment plan while they are seeking other full time work.  The federal government has strict rules and regulations for mortgage lenders to work with unemployed homeowners with a repayment plan to avoid foreclosures.

Housing Counselor Will Help Unemployed Homeowners

I strongly recommend that you contact a housing counselor which is a HUD approved housing counselor and explain to them your situation of being an unemployed homeowner.  A HUD approved counselor is certified in dealing with unemployed homeowners and will advise you on the various options and rights you have as an unemployed homeowner and will help you work with your mortgage lender in helping you to avoid foreclosure.  The HUD approved counselor will be knowledgeable with the Federal loan modification programs and other forms of mortgage workout and repayment programs that you might qualify for.  To get a list of HUD approved counselors in your area, contact 800-569-4287.

Contact Your Mortgage Lender

Unemployed homeowners need to contact their mortgage service provider as soon as they get news that they will become unemployed.  It is best to contact your mortgage loan service provider prior to you being late on your mortgage payments.  There are repayment programs for unemployed homeowners which unemployment homeowners can qualify only if they have not been late or are currently late on their mortgage payments.  So it is crucial that you contact your mortgage loan service provider the minute you hear the bad news.  As of Auguest 1, 2010, the federal goverment has implemented the Making Home Affordable Modification Program which offers assistance and benefits for unemployed homeowners who are current on unemployment benefits.  Under this federal assistance program for unemployed homeowners, the homeowner gets a reduced monthly mortgage payment where the adjusted mortgage payment will be not more than 31% of your household gross income.  For unemployed homeowners who have no income, the mortgage loan service provider can temporarily suspend the entire mortgage payments entirely until the homeowner becomes employed again.  There will be many forms that you need to sign and provide many documentations to your mortgage loan service provider such as proof of unemployment benefits.

Government Assistance For Unemployed Homeowners

Unemployed homeowners should contact their state and see if their state has assistance programs for unemployed homeowners.  There are states, like the state of California, where they have assistance for unemployed homeowners.  The state of California has unemployed homeowners assistance programs where the state will cover you up to six months of mortgage payments for unemployed homeowners who have been involuntarily unemployed.

Prolonged Period Of Unemployment

Unemployed homeowners who do not see a light at the end of the tunnel and do not forsee employment in the near future may need to consider other options.  Unemployed homeowners who become underemployed but forsee job stability with lower income, then they might consider requesting the mortgage lender a loan modification.  If unemployed homeowners do not see any forms of employment in the near future, then a short sale or deed in lieu of foreclosure may be the other option in order to avoid foreclosure.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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