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California
Association of Realtors Housing Affordablity Fund
Mortgage
Protection Program
Frequently
Asked Questions
What
is the Mortgage Protection Program?
The
Mortgage Protection Program provides a combination of involuntary
unemployment, accidental disability and accidental death
protection for qualified first-time home buyers. The program
is being offered by the California Association of REALTORS®
Housing Affordability Fund (“CARHAF”), to help
build confidence in the purchase of a home and to reduce
the fear of foreclosure in the event of a job loss or accidental
death or disability. CARHAF has committed $1 million to
provide this program to qualified home buyers.
What
are the benefits?
Through
the program, first-time home buyers who lose their jobs
or become accidentally disabled may be eligible to receive
up to $1,500 per month for up to six months to help make
their mortgage payments. A qualified co-buyer can also participate
in this program, for a reduced monthly benefit of up to
$750 per month for up to six months in the event of a job
loss or disability. In addition, the program offers a one-time
$10,000 accidental death benefit.
How much does it cost?
It costs
the home buyer absolutely nothing! If the home buyer is
granted an insurance policy, the insurance premium is prepaid
for one year by CARHAF.
Who
qualifies for this program?
An applicant
must:
• Be a first-time home buyer who hasn’t owned
a home in the last three years;
• Open and close escrow between 4/2/2009 and 12/31/2009;
• Purchase a primary residence in California;
• Be represented by a California REALTOR®; and
• Be a W-2 employee (i.e. not self-employed) but can
not be a sole proprietor,
partner or controlling stockholder in the business in which
you are employed, or a
dependent of a sole proprietor, partner or a controlling
stockholder in the
business in which you are employed.
There are no income or home price caps under this program.
Are
there any exclusions under the policy?
Yes. You
cannot be self-employed, an independent contractor, a business
owner, a temporary or seasonal worker, an educational employee
on a scheduled break, or work for your immediate family. There
are other exclusions such as voluntarily choosing to become
unemployed, expiration of employment contracts, willful misconduct,
criminal misconduct, death, disability, family leave, childbirth,
pregnancy and war. See the insurance policy for specific definitions
of these exclusions.
How
do home buyers apply?
Home buyers
must apply through a California REALTOR®. The REALTOR®
will submit the completed application to CARHAF on the home
buyer’s behalf. The application can be downloaded at
www.carhaf.org.
When does the home buyer get the insurance contract? An e-mail
confirming coverage under the insurance policy will be sent
to the insured and a special web address and password will
be included to use in order to access and review the insurance
policy within thirty (30) days after eligibility has been
verified.
Must
the monthly benefit amount be used to pay for the mortgage
payment?
Yes. Under
the CARHAF Mortgage Protection Program, a home buyer agrees
to use the insurance proceeds first to pay the mortgage, and
the remainder however he/she sees fit.
Are
the benefit payments taxable?
It is
possible that unemployment benefits may be taxable. Home buyers
should consult their tax advisor about any benefits received
and determine what tax rules apply. The plan pays regardless
of any other coverage a home buyer may already have.
For
general customer service questions, who do I contact?
Call Monica
Rodriguez at (213) 739-8380, or email Ms. Rodriguez at monicar@car.org.
Be sure to mention that you are a CARHAF Mortgage Protection
Program customer.
When
can the home buyer receive program benefits?
The insurance
policy requires a “vesting” period of six months
before becoming eligible to apply for benefits and a one month
“elimination” period before payments begin. More
information about the policy can be found at www.carhaf.org
or by calling Della Romero at RealCare at 800-939-8088 or
emailing her at dromano@realcare.biz.
How
long will this program last?
Applications
will be reviewed and insurance policies will be awarded on
a first come, first served basis until the program funds are
depleted or until CARHAF discontinues the program, whichever
occurs first.
Questions
about the Insurance Benefits
What
is meant by Involuntary Unemployment?
Under this plan, Involuntary Unemployment is defined as totally
and continuously losing
full-time employment as a result of:
(1) a permanent involuntary termination of employment; or
(2) an involuntary layoff or suspension of employment; or
(3) an authorized, unionized strike or labor dispute by a
chartered or previously
organized trade or labor union; or
(4) a lockout, discharge of employees or temporary closing
of business in response to
organized employee activity; or
(5) a state or federally declared disaster caused by a geological
or weather-related
natural event.
Involuntary Unemployment does NOT include quitting, resigning,
retiring, expiration of
an employment contract, being fired for cause, or being on
leave due to accident,
sickness, disability, family obligations, childbirth, pregnancy,
or due to scheduled
seasonal or temporary breaks.
What are the waiting periods?
Initial Vesting Period and Actively at Work Requirements.
Before involuntary
unemployment insurance can be utilized, there is an initial
Vesting Period of six (6)
months and a four (4) month "actively at work" requirement.
These periods can run
concurrently, so you must be enrolled for at least six (6)
months and also be working for
at least 4 consecutive months immediately prior to the date
your involuntary
unemployment begins before you can have an unemployment event
qualify for a claim.
If you become unemployed anytime before the initial vesting
period is over, you will not
be eligible to file a claim, and you will have to return to
work for at least 4 consecutive
months before eligibility begins. The unemployment claims
procedure requires
documentation of registration with your state's unemployment
office which will verify the
date of your unemployment.
Elimination Period. Once the vesting period and "actively
at work" requirement has
been met, there is also a 30-day "Elimination Period"
before cash benefits are paid. The
first 30 days of involuntary unemployment are not covered.
How long do I get involuntary unemployment cash benefits?
There is a six (6) month "Maximum Benefit Period"
per unemployment occurrence. You
will be paid 1/30th of the monthly benefit amount for every
day you are unemployed
(beyond the vesting and elimination period) up to a maximum
of 6 months. You will be
paid in arrears, not in advance.
If you go back to work after having a claim paid, you have
to return to work for at least
four (4) months consecutively, to "requalify" for
benefits. But this will only apply if you
renew the coverage beyond the first year.
How do I file an unemployment claim with the insurance company?
Contact 1-800-888-2738 for a claims package. Please mention
that you are a CARHAF
Mortgage Protection Program customer when doing so to ensure
that your call is
forwarded to the appropriate personnel. You will need to complete
the claims package
and submit it according to its instructions. You must register
with your state's
unemployment division. The claims administrator will verify
your coverage and start the
claims payment process. If the waiting periods are over and
your claim is otherwise
valid, you will be paid a benefit equal to 1/30th of the monthly
benefit amount for every
day beyond 30 days that you are out of work due to unemployment
for up to six (6)
months. The insurance company does not pay claims benefits
in advance.
If I get sick and am out of work do I qualify for Accidental
Disability?
No, it only pays if you miss work due to an accident.
Is there a vesting period for the Accidental Disability?
There is no initial vesting period for this coverage but it
does contain a 4 month "Actively
at Work" requirement among other conditions, exclusions
and limitations.
Can I upgrade my benefits or renew the coverage at the end
of the one year
program?
Prior to the end of the first year, you may be given the voluntary
option to renew at a
"contributory" rate, which may include the same
benefit package or an enhanced
package. Renewal of the product is subject to insurance company
and/or CARHAF
Mortgage Protection Program availability. Methods for payment
and other terms and
conditions will be provided along with the renewal offer.
The descriptions above are intended to serve as a summary
and are not part of the
insurance contracts. You should consult your own insurance
policy or certificate for the
specific terms which apply to you.
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