Can I Refinance Without A Job?

Lara Sirois heard our story about homeowners struggling to navigate their way through the federal Making Home Affordable program. She adds her name to the list of frustrated homeowners seeking help, and asks this question:

My husband and I found a loophole in this program (not the good kind): he's been laid off since last November. I got laid off in February but have had short-term contract work that's ending this week. We'll both be on unemployment and so are not eligible as Citibank does not consider unemployment benefits to be reliable income. If one of us were working — and making less than we do on unemployment — then we'd be eligible. Both of us out of work and needing help more than ever? Not eligible. We're not sure how this is supposed to be helpful. Isn't it better if we try to be proactive and get help BEFORE we're in dire straits?

I ran this by the Treasury Department point person on the Making Home Affordable program. She says unemployment IS counted as income under the plan:

As of now, unemployment must continue for nine months to be counted, but we are consistently reviewing requirements. People on unemployment are eligible, and people on unemployment have gotten loan modifications.

There are a number of different parameters for eligibility (can be found on MHA website), so I can't comment on why this couple in particular is having difficulty. The administration is committed to keeping families in their homes and we are exploring ways to reach as many in need of assistance as possible.

Julia Gordon, of the Center for Responsible Lending, says it may be true that Lara officially qualifies — but that doesn't mean her lender will choose to refinance her loan (not news to Lara). Lenders are looking for strong likelihood that Lara has/will soon have a stable income. Many people on unemployment have no way of showing that.

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