I primarily post about investment real estate but when something relevant to veterans presents itself, I try to get the message out in the hopes that I can help my brothers and sisters-in-arms. In this case, there is some big news regarding VA home loans and some relief for struggling veteran homeowners.
The Department of Veterans Affairs is hitting the pause button on foreclosures for veterans and service members with VA-guaranteed loans, extending the relief for the next six months. The VA is emphasizing its commitment to helping veterans and their families stay in their homes. In the past year, more than 145,000 veterans and their families have received support, allowing them to keep their homes and avoid foreclosure. Despite the challenges in the housing market, the VA-backed mortgages continue to have some of the lowest foreclosure rates in the country. However, the VA acknowledges that there are still veterans facing difficulties in making their mortgage payments.
This decision comes in response to an NPR investigation that revealed the vulnerability of thousands of veterans who, through no fault of their own, were at risk of losing their homes despite participating in a COVID forbearance program established by Congress. The COVID-19-era Veterans Assistance Partial Claim Payment program allowed those facing financial hardship to defer mortgage payments for six or 12 months, with the missed payments tacked onto the end of their loan term. Unfortunately, the VA terminated this program in October 2022.
To address this gap, VA officials have introduced a new program to replace the Partial Claim Payment initiative. This involves the VA acquiring defaulted VA loans from mortgage servicers, modifying them, and adding them to VA-owned portfolios as direct loans. However, NPR reports that the implementation of this program will take four to five months, missing the window for the 6,000 individuals with COVID forbearances already in the foreclosure process and the 34,000 who are delinquent.