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Daily Real Estate News  |  July 7, 2011  |   Obama Announces More Aid for the Unemployed
Home owners who have lost their jobs will get more mortgage relief. The Obama administration has announced that two programs for unemployed home owners will extend the forbearance period on mortgages to 12 months.

For unemployed home owners with a Federal Housing Administration loan, the forbearance period will be extended from four months to 12 months. The Obama administration also said it will remove hurdles to make it easier for unemployed borrowers to qualify for FHA’s Special Forbearance Program.

“The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” U.S. Housing and Urban Development Secretary Shaun Donovan said in a statement. “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.áProviding the option for a year of forbearance will give struggling home owners a substantially greater chance of finding employment before they lose their home.”

The administration also announced that it will extend the minimum forbearance period in the Making Home Affordable Program from three months to 12 months for eligible unemployed home owners, when possible under regulator and investor guidelines. Forbearance will also be available to borrowers who are seriously delinquent.

All FHA-approved mortgage servicers are required to participate in FHA’s Loss Mitigation Program, which includes the Special Forbearance program.á

Obama: More Needs to be Done to Handle Housing Crisis

The announcement of more aid for unemployed home owners comes shortly after a Twitter town hall meeting Wednesday where President Obama said one of his administration’s biggest mistakes in its handling of the economy has been its response to the housing crisis and “not doing enough” to help home owners.

"The continuing decline in the housing market is something that hasn't bottomed out as quickly as we expected, and so that's continued to be a big drag on the economy," Obama said during the town hall forum. "We've had to revamp our housing program several times to try to help people stay in their homes and try to start lifting home values up."

Source: “Obama Administration Offers Additional Mortgage Relief to Unemployed Home Owners,” HUD (July 7, 2011) and “At Twitter Town Hall, Obama Concedes ‘Not Enough’ Done to Address Housing Crisis,” Washington Post (July 7, 2011) and U.S. Department of Housing and Urban Development (July 7. 2011)

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