Did you know about Home Affordable Unemployment Program (UP)?

I have a Santa Cruz client who was considering a Short Sale when he told me he was just recently laid off from Seagate.

What is the Home Affordable Unemployment Program (UP)?
The Home Affordable Unemployment Program (UP) provides homeowners a forbearance, which is a temporary period of time during which your regular monthly mortgage payment is reduced or suspended. This program will be available on or before July 1, 2010 to eligible unemployed homeowners through participating HAMP servicers. Visit www.MakingHomeAffordable.com/contact_servicer.html to find out if your servicer is a program participant and when they will make up available to homeowners.

How do I know if I'm eligible for UP?
Participating servicers are required to offer an UP forbearance plan to you if you meet the minimum eligibility criteria:

• The mortgage loan is secured by a one- to four-unit property, one unit of which is your principal residence.
• The mortgage loan is a first lien mortgage loan originated on or before January 1, 2009.
• Have an unpaid principal balance of the mortgage loan that is equal to or less than:
  • 1 Unit: $729,750
  • 2 Units: $934,200
  • 3 Units: $1,129,250
  • 4 Units: $1,403,400
• The current unpaid principal balance of the mortgage loan is equal to or less than $729,750.
• The mortgage loan is delinquent, or default is reasonably foreseeable.
• The mortgage loan has not been previously modified under HAMP, and you have not previously received an UP forbearance period.

In order to be eligible, you must also:

• Request that your servicer consider you for UP before three full mortgage payments are due and unpaid. Visit www.MakingHomeAffordable.com/contact_servicer.html to find out if your servicer is a program participant.
• Be unemployed when you request consideration for UP, and be able to document that you will receive unemployment benefits in the month of the forbearance period effective date.
• Your servicer may require that you have been on unemployment benefits for up to three months before your forbearance period can begin.

How do I apply for UP?
Contact your servicer immediately. You can phone, email, or write to your servicer to request an UP forbearance plan. Your servicer must be a participating HAMP servicer in order to offer the program. www.MakingHomeAffordable.com/contact_servicer.html to find out if your servicer is a program participant.

How long is the UP forbearance period?
The UP forbearance period is at least three months long. It can be extended, however, depending on investor and regulatory guidelines. Contact your servicer for more information.

What happens during the UP forbearance period?
During the UP forbearance period, your monthly mortgage payment must be reduced to no more than 31 percent of your gross monthly household income. Be sure sure to make these payments in a timely manner so as not to jeopardize your eligibility.

What happens at the end of the UP forbearance period?
If you get a new job during the forbearance period, let your servicer know. Otherwise, 30 days before your forbearance period expires, your servicer will provide you with an Initial Package so that you can request a modification through the Home Affordable Modification Program (HAMP). Return the Initial Package immediately so that the servicer can formally evaluate you for HAMP.

Is UP available for my 2nd mortgage?
No. UP can only be applied to a first mortgage.

What if I'm not eligible for UP?
If you are determined to be ineligible for HAMP, the servicer will consider you for other home retention options. If homeownership is no longer an affordable or desirable option, the servicer will consider you for additional foreclosure avoidance programs, including Home Affordable Foreclosure Alternatives Program (HAFA).