Florida’s housing market has been suffering for some time. Unfortunately, despite the many efforts to stabilize it, there has been little improvement. Many people who lost their jobs have been struggling to make ends meet and especially to make mortgage payments. The unemployment rate keeps rising and the average length that people stay unemployed is the longest since records have been kept.
Unemployed low-income Florida homeowners have recently been offered help under a new federal program. This program offers help for families during their period of unemployment in the hope that these homeowners will be able to avoid foreclosure.
Under the new program, if a mortgage service provider has a loan backed by the Federal Housing Administration (FHA), then help may be available. If a borrower pays half of the mortgage, then he or she may have up to two years to defer their mortgage payments. Otherwise, a homeowner can receive up to one year to defer mortgage payments to get back on their feet. Previously, such help was provided for only four months.
The principal balance would still remain and some interest would accrue, but at least these homeowners will not be facing imminent foreclosure if they are unable to make the payments while they are not receiving income.
While this new federal program will certainly help some, many in need will most likely not benefit from it. This is because only 14 percent of mortgages are backed by the FHA. It is estimated that some tens of thousands will be assisted, but this number is much less than the hundreds of thousands and maybe even millions of unemployed of Americans who are currently struggling financially.
As we have seen, the banking industry has been reluctant to offer any assistance to struggling Florida homeowners. Florida residents who are unemployed and who do not qualify for the new program should consider seeking advice about how to best approach their financial struggles before considering that foreclosure is their only option.
Source: The St. Petersburg Times, “Help for mortgages is good but not enough,” 11 July 2011