The federal housing administration (FHA), under an initiative from the White House, will extend the time period when banks can foreclose on homes, according to AJC.com.
This comes as great news for the chronically unemployed whose homes are seized by banks after missing just a few mortgage payments.
Now unemployed homeowners can miss 12 payments instead of 4 before their homes are foreclosed upon.
“The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” U.S. Housing and Urban Development Secretary Shaun Donovan said.
“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,” Donovan said.
All FHA-approved banks must participate, according to a Housing and Urban Development press release.