(Photo: BasicGov)
In response to a report by NPR that revealed thousands of Veterans were at risk of losing their homes due to the termination of a COVID forbearance program, The VA has taken action by suspending foreclosures for six months on VA-backed loans.
The forbearance program, established by Congress during the pandemic, allowed Veterans to skip mortgage payments for six or 12 months, providing an affordable way to resume payments later. However, the VA ended the program in October 2022, leaving thousands of Veterans facing foreclosure.
VA Press Secretary Terrence Hayes emphasized the department’s commitment to assisting Veterans, stating that “Helping Veterans and their families stay in their homes is a top priority at VA.” The foreclosure pause, extending through May 31, 2024, will provide a temporary reprieve for Veterans who are in danger of losing their homes through no fault of their own.
Following NPR’s report, a group of Democratic senators, Sherrod Brown, Jon Tester, Jack Reed, and Tim Kaine wrote a letter to VA Secretary Denis McDonough, urging an immediate halt to foreclosures. The senators stated that the foreclosures were never the intent of Congress and could lead to thousands of Veterans losing their homes.
The VA, in its statement, acknowledged the need to pause foreclosures, saying it would work with mortgage servicers to implement home retention solutions for Veterans. Additionally, the COVID-19 Refund Modification program will be extended through May 31, 2024, offering Veterans zero-interest, deferred-payment loans to cover missed payments and modify existing VA-guaranteed loans for affordable monthly payments.
To address the long-term challenges, the VA is launching a VA Servicing Purchase program, which will allow the department to purchase defaulted VA loans from mortgage companies. Through this program, the VA plans to modify the loans, maintain them in a VA-owned loan portfolio, and work with Veterans experiencing severe financial hardship to adjust their loans and monthly payments.
While these measures alleviate the immediate crisis, challenges persist for the approximately 6,000 Veterans currently in the foreclosure process and another 34,000 delinquent, according to data from ICE Mortgage Technology. Senate Democrats commend the VA’s swift response but highlight the urgency of finding solutions for struggling Veterans.
The VA urges Veterans facing difficulties making mortgage payments to call 877-827-3702 or visit www.va.gov/housing-assistance for assistance.
Author: Rikki Almanza
Rikki is a Web Content Coordinator for the American Legion, Department of California. With a deep-rooted connection to the military, a spouse who is a Navy veteran, a father who served in the Air Force for 25 years, and a grandfather who proudly served, Rikki is committed to using her skills and knowledge to provide valuable assistance and resources to servicemembers and veterans.