Families with FHA-insured mortgages can receive immediate assistance to keep a roof over their heads, thanks to an Administration initiative announced by Secretary Martinez. HUD's Special Forbearance Initiative will permit lenders of FHA-insured mortgages to assist creditworthy borrowers who are behind in making mortgage payments because they are temporarily unemployed.

"The loss of your home because of temporary unemployment can make an already difficult situation much worse," Martinez said on Tuesday. "The plan that I'm announcing today will help individuals and families with good credit records keep their homes, and for most their largest investment, while they look for work and get themselves back on their feet."

The initiative was recently distributed to FHA approved lenders and is expected to help thousands of homeowners avoid losing their homes through foreclosure. In fiscal year 2002, the Department helped more than 64,000 FHA-insured homeowners avoid foreclosure. That number is expected to rise during the coming year.

Under the terms of the initiative, a lender may enter into a written special forbearance agreement with a borrower whose mortgage is at least three months but not more than 12 months overdue, and whose loan is not in foreclosure at the time the agreement is executed.

Read more about the new Special Forbearance Initiative

Read Mortgagee Letter 2002-17, which provides FHA lenders with details of the new special forbearance procedures.