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Mortgage Relief for Medical Bills and Unemployment
August 8, 2010 by Robert Fraijo · Leave a Comment
I noticed an article in the San Francisco Chronicle about a new pool of Federal assistance money. This might be a good strategy for borrowers to bridge the gap while temporarily unemployed, or if hit with unexpected medical bills. It could also be part of a plan to best utilize a short sale on your principal residence, as the assistance money will “buy” some time for you and your family to resume payments on your mortgage, or will give us ample time to negotiate a short sale with your bank.
Congress has just come up with an extra $1 billion to help people who can’t pay their mortgage because of unemployment or a medical problem.
Under this new Emergency Mortgage Relief program, eligible homeowners who are at least three months delinquent can get up to $50,000 apiece in federal loans to pay their mortgages.
The money for this program came in the financial regulation bill signed last week and will be made available to the U.S. Department of Housing and Urban Development on Oct. 1.
According to the 1975 act, as amended by the new law, HUD can provide assistance to homeowners who have suffered “a substantial reduction in income” because of involuntary unemployment, underemployment or medical conditions.
Homeowners must be at least three months behind in their payments and the lender must have indicated an intention to foreclose. There also must be a “reasonable prospect” the homeowner can resume payments. The loan must be on their primary residence.