by Michele Lerner
Fear of an unexpected job loss may be one of the biggest concerns for homebuyers and may reduce their willingness to make an offer. To address this potential stumbling block, MAR is providing job loss insurance
for REALTORS® to offer buyers. The Job Loss Mortgage Protection Program, offered through NFP Insurance and only available to Massachusetts REALTORS®, is an insurance policy to protect potential buyers in the event of unemployment. The program offers a few options for REALTORS® to provide extra security to buyers or offer sellers an added advantage in working with a REALTOR®.
“Every time someone puts the TV on, the stories are about the lack of jobs and about housing problems,” says Tom Arcieri, managing director of NFP Property and Casualty division. “This insurance program tackles both
issues. For buyers still on the fence and worried about the economy, offering this insurance gives them the peace of mind that they will have six months of mortgage payments made for them while they collect unemployment and look for work.”
How the Program Works
The program offers a choice of three types of protection that provide six months of monthly mortgage payments for a buyer should he lose his job.
1. Cynosure Secure Insurance
As a great listing incentive, REALTORS® pay for one or two years of insurance coverage on the seller’s behalf for the homebuyer in case of a job loss. The annual cost of a policy covering $1,500 a month for six months is $250. For six monthly mortgage payments of $1,000 per month, the annual cost is $175. A sliding scale of protection for larger mortgage payments may be available, if needed.
2. Mortgage Lender Participation
Lenders who work with REALTORS® locally can sign up for this insurance and pay for the buyer’s protection, subject to minimum lender production requirements.
3. Quicken Home Loan Program
This two-year insurance option is provided at no cost to consumers who choose this loan product. A protection plan combined with a home appliance warranty plan, identity theft protection, and homeowners’ insurance reimbursement through Quicken are also available. Arcieri says that job loss protection insurance, if widely purchased, could stabilize the housing market across the nation.
“The number one reason for foreclosure is unemployment, so insurance like this could significantly slow the foreclosure rate by giving homeowners a window of time to look for work while their mortgage continues to be paid,” Arcieri says.
For a minimal cost, the Job Loss Mortgage Protection Program can add significantly to potential buyers’ sense of security and may be just the extra confidence boost they need to make an offer.
For more information on this benefit, visit click here.