Unemployed to Get Year's Break on Paying Some Mortgages
Loan servicers collecting payments on FHA-backed loans must allow qualified borrowers who lose their jobs to miss up to a year of mortgage payments before starting foreclosure proceedings against them, the Obama administration announced Thursday.
The FHA's current three to four months of required unemployment forbearance is "inadequate for the majority of unemployed borrowers," Housing Secretary Shaun Donovan said in announcing the change.
"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," Donovan said. "Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home."