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Mortgage help for jobless coming?

A jobs sign is seen on the front

A jobs sign is seen on the front of the U.S. Chamber of Commerce building in Washington, D.C. (Sept. 2, 2010) Photo Credit: AFP/Getty Images

Jobless homeowners might get longer breaks on mortgages under certain borrower rescue programs overseen by the federal government.

They'll be allowed to make small or partial payments for a minimum of 12 months instead of three or four under the Obama administration's forbearance programs, federal officials said Thursday in rolling out the changes. In forbearance, the lender postpones payments for a certain time before asking for a lump sum repayment, or the lender tacks the debt to the end of the mortgage period.

The Federal Housing Administration, which insures loans aimed at lower-income buyers, will require its loan servicers to give a minimum of 12 months' forbearance, up from four months.

Borrowers who qualify would still have to make partial monthly payments, but they can get relief for years. That’s because the maximum forbearance period is not based on number of months but dollars – a year’s worth of delayed principal and interest payments. So if a homeowner pays half of what’s owed each month, that can lead to two years of forbearance.

Under the Making Home Affordable unemployment program, the minimum forbearance period would go from three months to 12 months. Lenders’ ability to do this will depend on their contracts with investors, but the Obama administration said this should be done “whenever possible.”

“The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” said Shaun Donovan, head of the U.S. Department of Housing and Urban Development. “Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.”

On Long Island, the unemployment rate is 6.7 percent, compared with the nation's 9.1 percent.

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