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Obama Administration Requires Banks to Extend Foreclosure Forbearance for Unemployed Workers

The June jobs numbers, which came out on Friday, show just how dire and desperate the situation is for unemployed workers. As I travel the country, I hear the heart-wrenching stories over and over—including many of those who have been out of work for months and are on the verge of losing their homes. So this week’s White House announcement on helping homeowners with foreclosures is welcome news. Amidst the worsening foreclosure crisis, millions of unemployed homeowners facing imminent foreclosure will finally get some relief through adjustments made by the Obama administration.   

Announced on Thursday, the Federal Housing Administration’s (FHA’s) Special Forbearance Program will now require mortgage loan servicers to extend the forbearance period from three months to 12 months and remove obstacles making it easier for unemployed borrowers to qualify for the adjustment. 

 

The administration also plans to require servicers who are part of the Making Home Affordable Program to extend the minimum forbearance period from four months to 12 months.

Many homeowners were hit hard by the Wall Street-caused recession—first losing their jobs and then facing foreclosure. These adjustments will help struggling homeowners by giving them more time to look for work without being thrown out of their homes. 

AFL-CIO President Richard Trumka in a statement yesterday said that we need to make the banks that caused the economic recession pay their fair share. And he’s right.  It’s also critical that we hold the banks accountable for adhering to this new change and follow up this announcement with real enforcement.

But while these changes are a step in the right direction, they are still only temporary solutions to a bigger problem.  More time won’t help unemployed workers if there aren’t any jobs.  We must step up our efforts to rebuild our economy by investing in our nation’s infrastructure. This is the only way to address the housing and foreclosure crisis.

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jobless workers
jobs
unemployment

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