Friday, Jul 8 2011 3:22PM
HUD announced its Special Forbearance Program will extend its minimum forbearance period from four months to a year.
The U.S. Department of Housing and Urban Development (HUD) announced the Federal Housing Administration (FHA) is extending the forbearance period for unemployed homeowners from a minimum of four months to one year.
The FHA's new mandates for the Special Forbearance Program are aimed to help jobless homeowners with FHA-insured loans stay in their homes while looking for re-employment.
Additionally, the FHA is now requiring servicers which are part of the Making Home Affordable (MHA) program to extend the minimum forbearance period to 12 months when possible.
"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," said HUD Secretary Shaun Donovan. "Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home."
Sarah Wartell, executive vice president with the Center for American Progress, told Reuters the extended forbearance period should benefit both the housing market, as fewer foreclosed homes would be added to the market, and struggling homeowners nationwide.