Job Loss Protection for Homebuyers

Apr 13, 2011

Today’s residential real estate market is unique in many ways.  Never before have we enjoyed historically low mortgage rates, home prices on “sale” with prices retracted by 15-20 years in many markets and inventory (selection) remaining high. We have experienced one or two of these conditions, but currently buyers enjoy the benefit of all three. However, that said, we remain far short of our nationwide sales pace of just a few years ago.  A deeper look into the sales would show an even greater gap if the surge in investor purchases were removed.

This tells us two things:

1. The surge in investor activity tells us the “professionals” have recognized this as a good time to purchase.

2. Given interest rates, prices and inventory are all favorable; however, the missing ingredient is confidence; thus, the entry of Job Loss Protection for homebuyers.

Sellers using Job Loss Protection as a confidence builder is not a unique approach. Hyundai, General Motors, Ford, Jet Blue, Sears each have introduced some form of job loss protection to instill added buyer confidence and attract qualified, but apprehensive buyers into the marketplace.  Most of the larger national home builders have done the same.  Now every home seller in Colorado can take advantage of the same marketing, by including Job Loss Protection with their listing. Home sellers can inspire confidence and enjoy the benefits of added buyer traffic to their listing.  This has become magnified as traditional sellers are now typically competing with more price-focused foreclosures and short sales. Adding the Job Loss Protection can help “stage” their home in such a way to attract buyers afraid or unwilling to consider a foreclosure.

Statistics show that the number one time period for foreclosure is the first two years (when the buyer’s resources have been depleted used for down payment, moving, and possible home improvements) and the number one cause of foreclosure is job loss.  With that knowledge, a two-year membership with the Job Loss Protection will protect the homebuyer/owner during this timeframe.  Now the question becomes — “How can you purchase a home without Job Loss Protection?”

Over the past several years, more and more homebuilders and some of the big banks have started to provide Job Loss Protection to instill added confidence for today’s homebuyers.  As a result, real estate agents and companies across America are also realizing the ability to inspire buyers into the marketplace by providing such added protection. This has sparked the obvious reaction; traditional sellers (non-foreclosure/short sale) have recognized the value of adding this “virtual staging tool” to their listing, generating a broader pool of potential buyers.

While the more recent years has drawn a focus on the Job Loss Protection program as being a foreclosure avoidance program, the true (and remaining) value of the program is more of a credit protection, helping buyers keep their mortgage payments current while seeking a replacement job, foreclosure avoidance being an obvious potential bonus.

I see Job Loss Protection as being part of “Responsible ownership”.  No one would take a ride with a child if they believed today would be the day they would have an accident, but they still place the child in a protective seat.  No one purchases a home believing they will shortly lose their job, but similar, they should make sure they have Job Loss Protection.

For more information regarding our Job Loss Protection program, whether you are a prospective home buyer, or home seller, please contact me.


Christian Durland

Mortgage Broker

First Cal Colorado


Quick Search