Mortgage bankers propose forbearance for the unemployed
Mortgage bankers propose forbearance for the unemployed
In a recent development, the Mortgage Bankers Association (MBA), and members including Bank of America Corp (BAC.N) and Wells Fargo & Co (WFC.N), has proposed a new forbearance plan for the jobless homeowners. Some of the other companies which helped MBA in developing this proposal are Citigroup Inc’s (C.N) CitiMortgage, American Home Mortgage, SunTrust, etc. The proposal has been placed in front of the top U.S. officials. The Treasury has also been contacted for credit to support the plan.
Why forbearance for unemployed?
It has been found that due to job loss, a large number of borrowers are unable to qualify for the relief programs like HAMP and HARP offered by the government. Thus, the Mortgage Bankers Association has come up with the proposal of forbearance for unemployed.
What could the unemployed expect under this plan?
Any unemployed borrower will get forbearance for 90 days. The plan could be re-evaluated for two more periods depending upon the borrower’s financial situation. The borrowers would be re-evaluated for HAMP after the 9 months are over or when the borrower gets a job.
Why would loan servicers participate in this plan?
Participation in this program is voluntary. The MBA have requested the U.S. Treasury to initiate special loans to the companies that advance payments to investors during the forbearance period.
The MBA met with Treasury, White House and Department of Housing and Urban Development representatives in regards to this program. All the departments have accepts the proposal in a positive way and open mind.
February 27th, 2010 at 12:05 am
It’s really good to know that the Mortgage Bankers Association (MBA) has taken the initiative and proposed a forbearance plan for the unemployed. It has been noticed that after job loss, a large number of people are unable to take advantage of the debt relief programs introduced by the Obama government. If the forbearance plan is accepted, the unemployed borrowers would be in a better position to deal with their debts.