The Federal Housing Administration and the Treasury Department will require mortgage servicers to extend the forbearance period for unemployed homeowners to one full year. The Obama administration also said Thursday it would remove "upfront hurdles" to the FHA Special Forbearance Program, which previously provided a four-month forbearance, to make it easier for unemployed borrowers to qualify. The Treasury will require servicers participating in the Home Affordable Modification Program's unemployment initiative to extend the minimum forbearance period from three months to of 12. Borrowers participating in the HAMP Unemployment Program, or UP, will be able to obtain a forbearance if they are seriously delinquent. "The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers," said Department of Housing and Urban Development Secretary Shaun Donovan. "Today, 60% of the unemployed have been out of work for more than three months and 45% 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." Mortgage servicers are required to review borrower cases after the forbearance period under the FHA program to see if they can qualify for any foreclosure assistance. If the borrower does not, the mortgage servicer must provide a reason for denial and allow the borrower at least seven days to submit more information that may influence the servicer's evaluation. "We have been disappointed that more servicers have not gone beyond the four-month minimum, which is why we raised the requirement," Donovan said in a conference call Thursday. He added roughly 3,500 borrowers fall into 90-day delinquency every month as a direct result of unemployment. Last year, roughly 17,000 homeowners received at least some sort of special forbearance, but Donovan said it was difficult to immediately determine if they received the assistance because of unemployment. "But this is the eligible universe," Donovan said. In June, the HUD released the long-awaited $1 billion in interest free loans to unemployed borrowers to go toward their mortgage payments. The Emergency Homeowners' Loan Program will provide funding to 32 states, plus Puerto Rico. A total of $7.6 billion from the Treasury Department's Hardest Hit Funding goes to 18 states and the District of Columbia to fund state programs for the unemployed. Write to Jon Prior. Follow him on Twitter @JonAPrior.