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Government extends relief for delinquent, unemployed homeowners

Many people in Washington, D.C., and the surrounding areas are still feeling the effects of the recession. Some may have found themselves in serious debt, while others may have lost a job. The financial strain that many D.C. families who are affected by unemployment face can lead to other problems.

People are often forced to pick which debts to pay off first, and sometimes the mortgage is not at the top of that list. While currently just a few months of delinquent payments can lead to foreclosure, the federal government announced a new program today that will provide some additional relief for those struggling with unemployment.

The government announced today that it will extend the amount of time unemployed homeowners have to put off their mortgage payments before being foreclosed upon. According to a Bloomberg article, unemployed homeowners are currently afforded three to four months of delinquent payments before foreclosure proceedings can begin. Today, the government extended that time to at least one year for certain lenders.

The new regulations will be applicable to any lender that takes part in the Making Home Affordable program or that offers FHA-guaranteed mortgages. The secretary for Housing and Urban Development says he hopes this new rule will nudge other lenders toward providing similar relief for the unemployed. He says that for most individuals who are unemployed, a few months is not enough time to get back on their feet.

According to the Housing and Urban Development department, close to half of unemployed people have been unemployed for more than six months. Sixty percent have not had work for more than three months.

Hopefully this new program will provide unemployed homeowners the relief they need to get back on their feet and prevent foreclosure.

Source: Bloomberg, "Obama Administration Extends Foreclosure Programs for Unemployed," Lorraine Woellert, 7 July 2011

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