Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Government Eases Foreclosure Rules for Unemployed

Homeowners with FHA loans can wait 12 months to pay mortgage if unemployed

By the Associated Press

Posted Jul 8, 2011 11:03 AM CDT

(AP) – The Obama administration is making it easier for out-of-work homeowners to stay in their homes, as it tries to revamp its troubled foreclosure-prevention program. Starting Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments to a full year from three or four months. That will allow thousands of qualified homeowners to go 12 months without making a payment before the foreclosure process begins.

The extended grace period only applies to FHA-backed loans, which are usually given to low- and middle-income borrowers, and represent about 14% of all active mortgages and roughly 25% of new mortgages. Last year, roughly 17,000 homeowners received a government-supported delay on their mortgage payments. About 3,500 borrowers with FHA-insured loans fall behind on their mortgages each month due to unemployment, officials said.

A foreclosure sign hangs on a fence in front of a foreclosed home on April 6, 2011 in Richmond, California. (Getty Images)

« Prev« Prev | Next »Next » Slideshow

CLICK BELOW TO VOTE

70%

30%

To report an error on this story, notify our editors.

More Newser Stories

Calif., NY May Sign On to Robo-Signing Settlement

Obama administration nearing deal for mortgage relief

(NEWSER) - California and New York are close to signing on to the Obama administration's multibillion dollar mortgage robo-signing settlement, significantly expanding the deal, the New York Times reports. If California signs on, the settlement total will jump from $19 billion to $25 billion. In exchange, the states want measures to help individual homeowners, and the ability to investigate the banks' other past mortgage misdeeds. California also wants to ensure that big pension funds can still sue the banks for false claims about mortgage-backed securities. More»

White House Not Backing Foreclosure Moratorium

Says legit foreclosures need to go through

(AP) - The wave of botched foreclosures is a "serious problem," David Axelrod told CBS today, but shutting the process down entirely isn't likely the solution because "there are in fact valid foreclosures that probably should go forward." "Our hope is this moves rapidly and that this gets unwound very, very quickly," President Obama's senior adviser said. More»

Dear US, You're Making the Mortgage Mess Worse

Stop meddling and the let the private sector take over

(NEWSER) - Joseph Stiglitz lends his Nobel clout to the notion that the government is doing more harm than good by over-managing the housing crisis. "Government policies to support the housing market not only have failed to fix the problem, but are prolonging the deleveraging process and creating the conditions for Japanese-style malaise," he writes in the Guardian . More»

US Offers Unlimited Aid to Fannie, Freddie

Feds also allow top officials to bring home fat paychecks

(NEWSER) - The Obama administration yesterday gave a blank check to Fannie Mae and Freddie Mac—just in case. The government declared it is willing to provide unlimited financial assistance to the mortgage giants over the next three years, a move designed to reassure markets that the US won't let them fail. The development comes along with a possible PR crisis, reports the Washington Post : Top executives at the two agencies are getting fat paychecks. More»

BofA, Wells Fargo Rank Worst for Loan Modifications

Treasury report rates banks' performance

(NEWSER) - Bank of America began modifying just 4% of its loans eligible under the Making Home Affordable Act, according to a Treasury report on big banks' performance, while Wells Fargo started just 6%. JPMorgan Chase led the pack with 20%, Bloomberg reports, while Citigroup had 15%. “Some of the servicers could have ramped up better, faster, more consistently,” said a Treasury official. “We expect them to do more.” More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Government Eases Foreclosure Rules for Unemployed

Homeowners with FHA loans can wait 12 months to pay mortgage if unemployed

OTHER STORIES ON OUR RADAR

home loans • housing crisis • Department of Housing and Urban Development • Obama administration

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Calif., NY May Sign On to Robo-Signing Settlement

Obama administration nearing deal for mortgage relief

White House Not Backing Foreclosure Moratorium

Says legit foreclosures need to go through

Dear US, You're Making the Mortgage Mess Worse

Stop meddling and the let the private sector take over

US Offers Unlimited Aid to Fannie, Freddie

Feds also allow top officials to bring home fat paychecks

BofA, Wells Fargo Rank Worst for Loan Modifications

Treasury report rates banks' performance

About Us

Site

Community

Site Maps

Tools

More News

What is Newser?