Using the Nation’s Workforce Development System to Help Unemployed Families Save their Homes from Foreclosure

April 5, 2013

By Neil Bomberg

Last week, Acting Labor Secretary Seth Harris announced HAMP Up, a partnership between the Department of Labor (DOL), Treasury and the Department of Housing and Urban Development (HUD) to promote the Administration's foreclosure prevention programs and to ensure that Unemployment Insurance (UI) recipients and unemployed workers are aware of the programs.

The announcement was part of a larger announcement by the Administration of a three-tiered program that is designed to connect unemployed workers who are also struggling homeowners to the Administration's foreclosure prevention program. Through American Jobs Centers (one stop centers under the Workforce Investment Act), eligible homeowners would be connected to existing foreclosure prevention programs, so that they can remain in their homes and go a long way to ensuring a brighter economic future for these families.

In the first program, the U.S. Department of the Treasury is partnering with NeighborWorks® America and participants in its National Foreclosure Mitigation Counseling program to increase outreach and support for struggling homeowners seeking assistance through the Making Home Affordable Program. Making Home Affordable includes the Home Affordable Modification Program (HAMP), which reduces monthly payments by a median of more than $540 each month and thereby effectively prevents foreclosure. Through the new initiative, housing counseling agencies will help struggling homeowners successfully complete and submit application documents to their mortgage company free-of-charge. These agencies will also develop and implement strategies to raise awareness of the program among potentially eligible homeowners, especially those in historically underserved communities.

In the second program, DOL is leveraging existing state infrastructure by encouraging American Job Centers across the country to inform unemployed homeowners about federal foreclosure prevention options available to them, including unemployment forbearance through HAMP, which allows qualifying unemployed homeowners to reduce or suspend their mortgage payments for up to 12 months. This enables them to focus on finding a job without worrying about how they will keep up with their mortgage payments.

In the third program, HUD has officially launched its Housing Counseling Office, which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Through its network of 2,500 HUD-approved housing counseling agencies, the Office offers at-risk homeowners free and/or low cost information about foreclosure prevention and loan modification programs. The Office also provides individuals and families with more general advice on buying or renting a home, dealing with foreclosures and credit issues, and avoiding frauds or scams.

For more information on these programs contact your local American Jobs Center (Workforce Investment Act one stop center).