Most folks agree it’s a big mistake to let government run bailouts, banks, mortgage companies or even hot dog stands. If left to its own devices, capitalism and private enterprise will come up with a solution.
Home builder Toll Brothers announced a Mortgage Protection Plan to promote home buying during an economy experiencing 8% unemployment. It will provide Involuntary Unemployment Insurance (Job Loss Coverage) to eligible home buyers who close and fund their loan with TBI Mortgage, a subsidiary of Toll Brothers, Inc.
For individual borrowers, 100% of your mortgage payment may be covered up to $2,500/month.
Here’s what the plan covers:
The plan may cover up to six monthly payments of principal, interest, real estate taxes, and homeowner’s insurance when the borrower experiences a qualified job loss (such as a layoff, strike or lock out) within 24 months after closing. The policy will cover the actual amount due to your lender each month up to $2,500/month (max. $15,000 over the 24 month plan term). If payments are less than $2,500/month, the excess amount above the actual payment cannot be applied to additional coverage beyond the six months. The plan also covers monthly Private Mortgage Insurance (PMI) and/or flood insurance payments, but does not cover Homeowner’s Association fees or other monthly costs.
Some restrictions:
- Borrowers must have been continuously employed for wages or salary for 12 consecutive weeks prior to the effective date of job loss for a minimum 30 hours per week.
- Borrowers can not have knowledge of any impending job loss as of the date of settlement.
- This policy is not available to borrowers who are self employed, independent contractors, active military, work for a family member, or own greater than 10% in their employer’s business.
- Borrowers need to be eligible to receive unemployment benefits and must file a claim in their state of residence.
- This program does not cover loss of employment due to voluntary resignation, willful misconduct, normal seasonal shut-down, temporary employment, death, disability or hospitalization.
It’s only a 6 month protection plan (which is short), but it’s a start. Hopefully, the private sector will show government how capitalism is supposed to work, coming up with creative ways to deal with the national housing/mortgage pickle.
h/t from my blog buds at SIREN.
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