American Savings Bank, a mortgage lender based in Irvine, has introduced a new program that provides free insurance to cover monthly payments for borrowers who purchase a home and then lose their job.
Under its Payment Protection Plan, borrowers who are involuntary laid off or terminated are covered for up to six monthly mortgage payments on adjustable mortgages for a maximum of $2,500 per month including principal, interest, taxes and insurance.
"We think one of the major obstacles or fears that home buyers have is the risk of losing their jobs," said Stephanie Christie, vice president and product manager with American Savings in Irvine. She said she knows of no other mortgage lender in California with such a program.
"I still think there is a fear of the economy and we hope that this will get people off the fence and into new homes," she said.