Unemployed Homeowners’ Help For Making Home Affordable

Homeowners, who have lost their jobs and are currently unemployed, can apply for the home affordable unemployment program which is also known as the HAUP or UP schedule. Mortgage relief can be secured to make monthly payments more affordable by qualifying for government grants with this federal government initiative. Thus, homes can be saved from possible foreclosures and finances got back on track despite your being jobless at present. However, it could be better if you had some idea of what the program is all about.

What is home affordable unemployment program?

The UP plan which became effective on the 1st of July, 2010, is primarily designed to supplement the home affordable modification program. All HAMP eligible borrowers that have been suffering from a job loss and as a result, finding it difficult to pay their existing monthly mortgage installments regularly can think of getting benefited with the HAUP. The schedule allows mortgage servicers to extend mortgage relief assistance to such homeowners whose financial hardship situations stem out of unemployment. As per rules and regulations that govern the UP program, lenders have been granted flexibility to provide a temporary forbearance period to unemployed borrowers who qualify. This means monthly payments will either get reduced or suspended for a pre-specified time frame during which the applicant can search for a job.

Who will qualify for unemployment mortgage relief?

Only those homeowners who meet the following home affordable unemployment program guidelines will be eligible for assistance.

• Borrower should be necessarily unemployed.
• Unemployment benefits must be got for 3 months.
• Home must be primary residence of applicant.
• Homes with 1 to 4 units will qualify for the plan.
• Mortgage must not have been modified with HAMP previously.
• Home loan should have originated either on or before 1st January, 2009.
• Principal loan dues must not be more than $729,750 for a single unit home.
• Existing payments have to be more than 31% of the borrower’s gross monthly income.
• Applicants should be delinquent on current mortgage payments for not more than 3 times.

There will be more such requirements for borrowers as well as lenders and their correct interpretation is necessary.

How does the HAUP plan for unemployed work?

Unemployed homeowners, who fulfill the conditions for loan modification plan for unemployed, will be provided forbearance or temporary suspension of monthly payments initially for a period of 3 months. The time frame may be extended further but such a proposition is at the sole discretion of the mortgage servicer. In any case, during such time period the home maker can search for a new source of employment. On re-employment or 30 days prior to the ending of the forbearance period, lender will evaluate the applicant for a loan modification under Home Affordable Modification Program Guidelines . If approved, the borrower will be first offered a trial loan modification.

Documentation needed to be furnished for UP plan

Any homeowner who wishes to fill out an application for the home affordable unemployment program needs to provide the below mentioned documents to his mortgage servicer.

• Request for mortgage assistance (RMA form)
• HAMP financial hardship affidavit
• A Third Party authorization form
• IRS form no. 4506T-EZ
• Model letter for UP forbearance
• Well documented proof for receiving unemployment benefits

If a homeowner is not eligible for the UP plan, lender will send a non-approval notice to the applicant by providing reasons for denial within 10 working days of having receives the application and offer foreclosure alternatives such as short sale or deed-in-lieu of foreclosure (DIL) under Home Affordable Foreclosure Alternative.

To get more valuable information on the HAUP program, you may seek help from a qualified expert.