Starting July 1, homeowners can apply for assistance from the Home Affordable Unemployment Program (HAUP). HAUP provides homeowners a forbearance of monthly mortgage payments, either reducing them or suspending them for at least three months. Servicers can extend the timeline depending on regulatory guidelines. In June, the unemployment rate edged down to 9.5% from 9.7% in May, according the Department of Labor. Homeowners who qualify for the program have a first-lien mortgage originated on or before Jan. 1, 2009. The unpaid principal balance on a single-unit primary residence must be equal to or less than $729,750, and the mortgage has to be in default or in imminent default. Those who have already gone through the Home Affordable Modification Program (HAMP) process are not eligible for the HAUP. HAMP requires borrowers to be employed with some income for the modification to be reduced down to 31% of the monthly income. But once the borrower finds another job or the borrower is 30 days from the end of the HAUP forbearance period, the borrower can be revaluated for a HAMP modification. HUAP joins the Home Affordable Foreclosure Alternatives (HAFA) program, which provides incentives to servicers for providing short sales and deeds-in-lieu of foreclosure, as another net to catch borrowers who fall out or fail the HAMP program. Write to Jon Prior.

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