September 24th, 2008 by Reed Allmand 
The Housing and Urban Development (HUD) has a special forbearance initiative known as HUD Special Forbearance Initiative which permits lenders of Federal Housing Administration (FHA) insured mortgages to assist creditworthy homeowners who are behind in making mortgage payments because they are temporarily unemployed.
To be eligible, the mortgage must be an FHA insured mortgage and the homeowner must:
- Have a good payment record and a stable employment history prior to this default
- Have a verifiable loss of income or increase in living expenses
- Be actively seeking employment, but have not received a commitment of re-employment at the time the lender is reviewing the homeowner’s financial information
- Be an owner-occupant, committed to occupying the property as a primary residence during the term of the special forbearance agreement; and
- Not have repeatedly broken past informal or formal forbearance plans without good cause.
Under this initiative, a lender may enter into a written special forbearance agreement with a homeowner whose FHA insured mortgage is at least three, but not more than 12 months overdue, and whose loan is not in foreclosure at the time the agreement is executed.
Under this initiative monthly mortgage payments can be postponed for a minimum of four months. While there is no limit on the maximum number of months, at no time may the agreement allow the delinquency to exceed the equivalent of 12 monthly principal, interest, taxes and insurance installments. The lender will verify the homeowner’s employment status monthly and renegotiate the terms of the special forbearance plan when the employment status changes. The lender will also verify that the property has no physical conditions that might adversely impact its continued use or ability to support the debt. Homeowner will not be able to obtain a special forbearance if the property is in such a deteriorated condition that repairs drain his monthly resources.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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