There are millions of jobless in America who are having a hard time affording their monthly mortgage payments.
Perhaps in response to this, Freddie Mac and Fannie Mae (those dreaded Mac siblings), are announcing an extension of a program that allows unemployed homeowners to defer part or all of their monthly payments for up to 12 months while they are out of work.
The mortgage deferment for unemployed homeowners is a form of forbearance.
Unemployed homeowners who apply for a forbearance after already missing some payments can skip only up to a maximum of 12 months. In other words, you can't go a year without paying, and then get a second year off also by applying for the program. Its just one one-year term.
It is still a pretty good deal, though how much impact it will have remains to be seen. Particularly because last year there were about 2 million foreclosures, reports The New York Times.
And, of course, there are critics as well. One from the University of Pennsylvania points out that while the program is "humane" there are some people who shouldn't be in the homes they are in and some of them won't end up finding jobs that will enable them to pay for their mortgages. As a result, there could be some downside because it could slow the foreclosure pipeline," reports The Times.
If you're one of those people that even with assistance from government programs would probably end up in a foreclosure, you may want to consider other options.
Selling your house for less than you owe is referred to as a "short sale", and in many states, you must get the permission of your lender before you do this. If you don't, the lender may sue you after the sale for the difference. Finally, short sales typically aren't possible if you have more than one mortgage, unless the same lender owns the additional mortgages.
For more information see below.
Related Resources:
- Find a Boston Real Estate attorney (FindLaw)
- Government Extends Mortgage Forbearance for Unemployed (DS News)
- Foreclosed? Federal Reserve Foreclosure Survey Coming Your Way (FindLaw's Boston Real Estate Law News)
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