Through "settings" to the requirements of the Federal Housing Administration (FHA), dealing with loans from the FHA loan services must extend the period of forbearance for the owners at 12 months unemployed now [1]. In addition, services that participate in the making home affordable (MHA) program must extend period minimum forbearance for 12 months "as much as possible under the regulatory and investor guidelines." HUD Secretary Shaun Donovan explained and supported the changes, saying that "current forbearance of unemployment programs have mandatory periods which are insufficient for the majority of the unemployed borrowers…""[as] 60 per cent of the unemployed have been their work for more than three months and 45 per cent were of their work for more than six".
Changes to programs must be in place by August 1, 2011 [2]. Previously, MHA has been limited to the borrowers who were unemployed and three months or less behind on mortgage payments. These changes extend the program to those who are "offender to serious." Changes to the period of forbearance will allow qualified owners to go a full 12 months without a mortgage payment prior to foreclosure.
Even though this may seem a very bad idea on the surface because it seems to extend housing market agony and put lenders in the red, it may be only formalize that many lenders are already as they delay the foreclosure process. Do you think that this extension of the forbearance is a good thing, ultimately, for the real estate market? It is the location of the Government to say how much time a lender must wait for foreclosure?
Please read the letter from Bryan Ellis real estate!
Your comments and questions are welcome below.
[1] http://nationalmortgageprofessional.com/news25787/fha-extends-forbearance-terms-unemployed
[2] http://www.pe.com/business/realestate/stories/PE_Biz_D_foreclose08.2c451fa.html
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