St Louis Loan: Unemployed Do Not Qualify For Loan Modification Programs

In the 4th quarter of 2010, Fannie Mae dealt a severe blow to the unemployed. Their announcement stated that these ones could no longer use jobless benefits as income when applying for the loan modification program.

Fannie Mae wanted the nation to know that they were not doing this to make it harder for borrowers to seek help. They were merely broadening the ban already in place by the Treasury Department.

Since this major change, those who are unemployed may still apply for HAMP but they will now be considered for a forbearance plan which could include a reduced payment for at least three months.

Fannie Mae’s new stance also prevents banks from using unemployment benefits in their own proprietary modification programs if the loan is backed by the mortgage finance company.

Experts are saying that this move no doubt hurts the overall economy even moreso since most of the new delinquencies in the mortgage market is largely due to the high unemployment rate.

Non-HAMP bank modifications are growing in importance as the government initiative loses steam.

Approximately 447,000 mortgage owners have received a permanent HAMP loan modification in August 2010 which was up from 421,000 in July.

Another 46,700 people fell out of the HAMP program in August, bringing the total to roughly 664,000. Some 26,600 entered the effort in the trial phase.

Some 202,500 borrowers are in the trial period as loan servicers evaluate their ability to keep up with the lowered payments.

Of those who fall out of the program, some 44.5 percent of them receive other types of modifications from their servicers.

Somewhere in the neighborhood of 13.9 percent default again on their new loan modification and wind up in foreclosure. Thus, many mortgage owners have to look to other alternatives such as a principal reduction program.

Although Fannie Mae says they are not setting up borrowers to fail, in reality, isn’t that what they are indeed doing?

Get a St Louis loan today. Also visit www.StLouisMortgageGroup.com for a Loan Audit. Principal Loan Reduction: Available for both homes and businesses. Call us at 314-334-0210 or 877-334-0210.