A growing number of job loss mortgage protection insurance policies help take the fear out of home buying, but the coverage -- sometimes over-hyped as a form of recessionary relief -- is not for everyone.

The not-for-everyone consideration isn't necessarily because of cost, the type of home you buy or the feasibility of such insurance, though they are issues to consider.

Unfortunately, for some homebuyers, the coverage simply isn't an option.

When it is available, there are a host of considerations consumers must ponder before buying.

Simply put, for policy holders, job-loss mortgage insurance pays your mortgage when you lose your job -- to a point. Typically paid direct to the lender, policy benefits can cover principal, interest, taxes and insurance, if all items are included in the original mortgage payment.

The coverage can be a good deal if you fear job loss, if you have no other financial back up should your employment end or if you know you later can't refinance or modify your loan out of trouble and don't want to lose your home.

Today's job-loss mortgage insurance has become a growth industry spawned by the recession. The idea is to incentivise home buying -- offer protection against the shrinking economy, take some of the fear out of buying and, hopefully, you'll spark more sales. Because housing is a cornerstone of the economy, more sales, hopefully, also will help stimulate the economy.

Anyway, that's the theory behind the marketing.

Consumer advocate Mark Eisenson isn't sold on the coverage. He says buying job loss mortgage insurance may be a sign you haven't taken care when buying a home in the first place.

"Losing a job is more than a nuisance. It can be a catastrophe. Unfortunately, job loss insurance is something you only want if you are overextending yourself by buying a house you can't really afford, at a time when you have real concerns about losing your job," said Eisenson, co-author of the new e-book "Reduce Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis."

Once only the product of traditional insurers, job-loss mortgage protection now comes from a variety of sources.

• Traditional insurers -- See: InsuranceAgents.com and Mortgage Guardian.

• Home builders for new homes -- Offering policies are: Toll Brothers; Lennar; Ryland and others.

• Banks, credit unions, lenders -- The Bank of America has long offered a policy that covers not only job loss, but also hospitalization, disability and death.

• Real estate agents -- For example, Keller Williams offers coverage through the Rainy Day Foundation.

• Realty associations -- At least one, the California Association of Realtors (CAR) offers coverage.

"This program is a big success and all buyers who use a Realtor are eligible. All qualified first time buyers should definitely enroll in this program because the restrictions are few," said Julia Truesdale Keady, president of the Silicon Valley Association of Realtors.

• State and local housing agencies -- For example, see NYHomes.org and the California Housing Finance Agency's HomeOpeners.

Facing job loss without mortgage insurance? Take a look at the mortgage modification route.

Published: July 2, 2009

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.