With millions of Americans facing the impending loss of unemployment benefits, it is important that those who are unemployed or may soon be understand what steps they need to take to keep from losing their homes.

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The Home Affordable Unemployment Program (or UP) was put in motion back in May, and as of August 1, unemployment benefits will only be considered for the UP program and not for HAMP applications. The Home Affordable Unemployment Program (UP) offers qualified borrowers a forbearance plan to temporarily reduce or suspend their mortgage payments.

If you face the loss of benefits and have a mortgage then you must act now to save your home. The most critical fact for you to keep in mind is that ONCE YOU ARE MORE THAN 3 MONTHS LATE ON YOUR MORTGAGE YOU ARE TOO LATE TO QUALIFY FOR THIS PROGRAM.

Servicers must offer a UP forbearance plan to a borrowers meeting the following criteria:

  • Home must be your principal residence and a one to four unit property.
  • Mortgage must have been originated before January 1, 2009 and the current unpaid principal balance can't exceed $729,750.
  • The mortgage must currently either be in default or on the verge of default.
  • The mortgage must not have previously been modified under HAMP or received a previous UP forbearance.
  • You must request the UP before three monthly payments are due and unpaid. You can request this by phone, mail or email. If it were me though I'd want to be able to prove exactly when I made my request.
  • You must be unemployed and have received at least 3 months of benefits (although this requirement can be possibly be waived by the lender) on the date you request the UP and you must document that you will receive benefits in the month of the Forbearance Period Effective Date even if the unemployment benefits are scheduled to expire before the end of the UP forbearance period.
  • The servicer must evaluate you for the program within 10 days and if they make a determination by the 15th your effective date would most likely be the 1st day of the following month.

There is no directive within the HAMP guidelines for the unemployed who have lost their benefits prior to applying for the program, and the guidelines do state that you must document that you will receive benefits in the month of the Forbearance Period Effective Date so apply BEFORE you lose your benefits.