Troy, Mich.-headquartered Flagstar Bank is offering a new low-down-payment mortgage benefit designed to cover a home buyer'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.
‘The job-loss insurance will provide peace of mind for buyers concerned about the employment situation in today's volatile economy,’ says Bill Robinson, executive vice president of Flagstar's home lending division.
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. The program does not cover seasonal, temporary and voluntary jobs or self-employment.
Flagstar Bancorp, with $14 billion in total assets at the end of 2009, is the second-largest publicly held savings bank headquartered in the Midwest.
SOURCE: Flagstar Bancorp