The U.S. Department of Labor announced the creation of a new Unemployment Benefit Estimation Tool that allows mortgage companies and housing counselors to project a homeowner's unemployment insurance income for loan modification purposes. The tool was created as part of collaborative effort among the Labor Department, the U.S. Department of Treasury, Fannie Mae, Freddie Mac, the Federal Reserve Bank of New York and the Hope Now Alliance.

"Helping unemployed Americans stay in their homes while they seek out new careers is critical to their success and is simply the right thing to do," said Assistant Secretary of Labor for Employment and Training Jane Oates. "This new tool will allow mortgage companies and housing counselors to accurately project the income homeowners may receive through unemployment compensation when processing home loan modification applications."

New loan modification programs created through the American Recovery and Reinvestment Act of 2009 — such as the Making Home Affordable Program — allow mortgage companies to utilize nine months of a homeowner's unemployment insurance income as part of determining his or her qualifications for a loan modification. Recent extensions of unemployment benefits have made this possible, and the tool unveiled today will make it easier to calculate benefits over several months. Prior to this new program, unemployment made it nearly impossible to qualify for a home loan modification.

Mortgage professionals may access the new tool at http://www.ows.doleta.gov/unemploy/ben_entitle.asp.

For information on the Department of Labor's full range of employment and training initiatives, visit http://www.doleta.gov.

For information on the Making Home Affordable Program, visit http://makinghomeaffordable.gov.