mortgage insurance

As unemployment grows, mortgage payment protection programs gain popularity

(LAT) - Is there a rainy day in your personal job forecast? That wouldn’t be surprising — not with unemployment rates in double digits in several states including California, 8.2% nationwide and widely expected to hit 10% or higher by next year.

Nor would it be surprising if uncertainty about your income is a major barrier keeping you out of the home-buying market this spring. That’s why a previously obscure charitable group based in Washington, D.C. — the Rainy Day Foundation — is doing a booming business in what’s called the mortgage payment protection niche.

Rainy Day is offering job-loss protection coverage and home buyer financial counseling through about 100 builders and lenders across the country, plus two large real estate brokerages, according to Chief Executive Rick Del Sontro.

Here’s how the Rainy Day plan works: Consumers buying homes through a participating builder, lender or realty agency can qualify for as much as six months of mortgage payments — capped at $1,800 a month in some versions and $2,500 in others — if they lose their jobs during the two years after their closing. There is no direct cost to the buyer. The insurance coverage is underwritten by Virginia Surety Co.

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