Flagstar Bank has announced a new low downpayment mortgage benefit designed to cover a homebuyer's mortgage payments if he or she becomes involuntarily unemployed. Called Job Loss Protection, the benefit is available at no charge on new loans with mortgage insurance provided by Genworth Financial. Mortgage insurance is required on loans with downpayments of less than 20 percent.
"We're happy to work with Genworth to offer this enhancement to our low downpayment loans. It will protect what is often a person's single largest investment — their home," said Bill Robinson, executive vice president of Flagstar's home lending division. "The job loss insurance will provide peace of mind for buyers concerned about the employment situation in today's volatile economy."
The program covers a borrower's mortgage payment (principal, interest, taxes and insurance) of up to $2,000 a month for up to six months during their benefit period, with a maximum of three monthly payments per job loss occurrence in the event of involuntary unemployment. Benefits are paid directly to the mortgage company just as if the borrower had made the payment. The borrower vesting period is 60 days after closing, and payments begin 30 days from the date of involuntary unemployment. Coverage stays in place for up to three years after the loan closes and the mortgage insurance remains in place.
Most unemployment events covered by state unemployment benefits are covered under the new Flagstar Bank program. Seasonal, temporary and voluntary jobs or self-employment are not covered, however.
For more information, visit www.flagstar.com.