Nonprofit Finds Unemployment Is Main Cause of Defaultsby Tim Manni
No big surprise here: the majority of borrowers receiving housing counseling through one nonprofit claim unemployment caused them to default:
Of the homeowners receiving foreclosure counseling through the National Foreclosure Mitigation Counseling (NFMC) program, 58% listed unemployment as the main reason for default.
The amount of borrowers citing reduced or lost income as the reason for default increased steadily over past year, up from 54% in November 2009, 49% in June 2009, 45% in February 2009, and 41% in October 2008. The increases paralleled the national unemployment rate.
As of May 2010, more than 967,000 borrowers received foreclosure counseling from the NFMC program.
Earlier this month, Washington announced the Home Affordable Unemployment Program (HAUP). HAUP – which will begin on July 01, 2010 – is designed to provide relief to unemployed homeowners. HAUP (referred to as “UP”), “offers eligible unemployed borrowers a forbearance plan to temporarily reduce or suspend their mortgage payments.”