Lenders, builders offering job insurance to buyers

An insurance program offered by some lenders will make a buyers mortgage payments if they are laid off.Some of the nation's largest homebuilders and banks are now offering potential buyers job-loss insurance that would make their mortgage payments if they suddenly found themselves laid off, the Washington Post reports.The programs are offered by many builders and lenders nationwide. For example, Bank of America offers what's called a “borrower protection plan,” which is limited to loans under $500,000. A spokesman told the paper that 156,000 buyers took advantage of the plan last year.While the programs generally don't cost money out-of-pocket, they are included elsewhere in the price of the loan or home. One provider told the paper that they programs end up costing $200 to $300 per policy.However, the programs do generally come with some restrictions. The paper says buyers must successfully apply for unemployment, and buyers cannot have known about the issue before the closing. Those who are fired for cause are also generally not covered.The new programs may help boost the sales of new homes in the Houston real estate market, as they have struggled nationwide. A report last week from the Commerce Department said the pace of new home sales had slipped to an all-time low in February.Courtesy of 2M Realty News

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