Unemployed borrowers must:
- Make the request for UP forbearance before the mortgage is seriously delinquent (before 90 days delinquent)
- Be unemployed at the date of the request, and be able to documents that he or she will receive unemployment benefits in the month of the "Forbearance Period Effective Date"
Unemployed borrowers who do not meet the UP forbearance criteria may be offered other forbearance programs. If not offered another forbearance plan, the borrower must be evaluated for HAMP. The HAMP evaluation will not include unemployment or severance payments in the calculation of gross income.
In addition, a borrower who was denied HAMP in the past may request UP if they meet all the eligibility requirements.
The UP forbearance period lasts a minimum of three months or until the borrower has become re-employed. It is up to the servicer’s discretion as to extending the forbearance period beyond three months. During the forbearance period the borrower’s payment will be reduced to 31% or less of the gross monthly income. The servicer has the option to suspend the payments in full, again at their discretion and according to investor guidelines. Any payments due during the forbearance period must be paid in the month due or the plan may be cancelled and the borrower will not be eligible for HAMP.
For additional details on UP, you can visit the Supplemental Directives page from available on the Making Home Affordable administrative website here.
If you're currently unemployed and receiving (or will receive) benefits... and would like to learn more about this program, contact a FREE non-profit Housing Counselor as soon as possible. In Minnesota, you can find your local Counselor, here.