The Obama administration announced on Thursday that it will be extending forbearance for unemployed homeowners for up to twelve months as part of an effort to reduce unemployment related foreclosures. Mortgage servicers for loans backed by the Federal Housing Administration and those participating in the HAMP program will now be required to extend forbearance to borrowers who qualify.
Currently, unemployed homeowners behind on mortgage payments or at risk of falling behind are eligible for just three to four months of forbearance. Advocates and federal auditors have been calling for an extended forbearance for homeowners receiving unemployment benefits for over a year.
“Today’s action is yet another step toward breaking the link in America between losing your job and losing your home,” said Rev. Lucy Kolin of the PICO National Network. “It’s only fair that the big banks who caused so much job loss in America extend relief to the millions of families who’ve lost their jobs as a result of the financial crisis.”