Brown Announces New Relief For Unemployed Ohioans Facing Foreclosure
New Changes to FHA and MHA Requirements will Remove Hurdles For Borrowers and Extend Program Length to Keep Ohioans in Their Homes
WASHINGTON, D.C. – July 7, 2011 – (RealEstateRama) — U.S. Sen. Sherrod Brown (D-OH) today announced new relief for unemployed Ohioans facing foreclosure. Changes announced today to Federal Housing Administration (FHA) requirements and the Making Home Affordable Program (MHA) would extend the timeline and remove hurdles for unemployed Ohioans to qualify for foreclosure assistance.
“Today’s reforms will help Ohioans on the brink of foreclosure due to job loss stay in their homes,” Brown said. “By increasing flexibility in these federal resources, we’re able to keep more Ohioans in their homes – stabilizing not only these families, but also their communities and our state’s economic recovery.”
The U.S. Housing and Urban Development’s (HUD) changes announced today will require servicers to extend the qualification period for the FHA’s Loss Mitigation Program, which includes the Special Forbearance Program, from the current four months to 12 months and remove upfront hurdles to make it easier for unemployed borrowers to qualify. The FHA will also require servicers to conduct a review at the end of the 12-month period to evaluate the borrower for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether the borrower is eligible for any other available option. The FHA’s Loss Mitigation Program helps assists FHA-insured homeowners who are in default or at risk of default.
Changes to Making Home Affordable Unemployment Program (UP) will require participating servicers to extend the eligibility period from the current 3 months to 12 months for eligible unemployed homeowners. The Making Home Affordable Program provides loan modifications to homeowners who are unable to make their monthly mortgage payments due to illness or unemployment.
After Ohio was left out of the states eligible for relief from the Hardest Hit Fund (HHF), Brown sent a letter to President Obama in February 2010 urging the program to expanded to Ohio. As a result of Brown’s efforts, Ohio became eligible to participate in the program and has received more than $570 million from HHF.
Earlier this year, Brown introduced landmark legislation to prevent future servicer fraud and errors, improve foreclosure counseling and prevention, and reform oversight of mortgage-based investing. Brown, who chairs the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, introduced the Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 which would expand access to foreclosure prevention services, while increasing protections for homeowners and investors in mortgage-backed securities.
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