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VA pauses foreclosure activity until May 2024
news.va.gov
By pausing foreclosures and extending the COVID-19 Refund Modification program, we can continue assisting Veterans with their loans while we launch our newest home retention option, the VA Servicing Purchase (VASP) program.
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7 Replies
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What does this mean? Does this mean a homeowner with a VA loan will not get foreclosed even if they do not pay their mortgage payments?
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It means they will not foreclose during this time frame and will work with the Veteran to find solutions to retain the home. I assume modifications and silent second mortgages will play a large part in remediation.
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The Department of Veterans Affairs (VA) has announced a new directive for mortgage providers, requesting they suspend foreclosures for VA-backed loans until May 31, 2024. This would grant Veterans and their families enough time to search for alternatives to losing their homes during these rough economic times.
Key Takeaways of the Announcement:
Loan Modification Program Extension: The VA will continue offering its beneficiaries the COVID-19 Refund Modification program until the same date, allowing a smooth transition period for people and families affected by the pandemic.
Mortgage Moratorium: A moratorium on VA-endorsed loans has also been recommended and will be discussed until its estimated new end date of December 31, 2024. It would ensure that eligible people in dire need can benefit from the VASP program.
Appeal Allowance: There is a strong emphasis on forbearance agreements. This would allow beneficiaries to pause or temporarily reduce their payments, giving families and individuals struggling with debt time to develop new payment plans.
Repayment Plans: How can I make the missed or late payments over time plans to save my credit record?
Loan Modifications: Can I change my loan rates to decrease the payback and make it less tough?
VASP Program: It is the last effort when the VA buys altered loans from services to help Veterans afford them. VASP is not a program that veterans apply for. Rather, the mortgage servicer evaluates the VASP after all attempts for home retention have failed.
Eligibility for VASP:
The VA’s policy aligns with the broader policy of assisting Veterans and their families in maintaining house ownership. Veterans need to contact their mortgage servicers to learn about the available options and help.
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How can I contact my mortgage servicer to discuss my options?
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Reaching out to the mortgage servicer and considering the options available can be done in the following ways:
Get in Touch with Your Servicer
Monthly Statement: The servicer’s contact number is usually included in the contact information you receive within your mortgage statement.
Online Account: Check the customer service information online if you have access to an online account.
Website: Check the mortgage servicer’s official website to find contact information.
Information Collection
Have a loan number or any other relevant details ready to facilitate communication.
Be ready to provide an overview of finances and the problems you’ve been facing specifically.
Place a Call
Call the customer service number provided and note down the number properly. You can also place the call during operational hours so that a representative can assist you.
Explain that you wish to evaluate all alternatives concerning your mortgage obligations, especially in light of the VA’s pronouncements.
Make Requests
Request options like forbearance, repayment plan, and loan modification.
Ask questions about the VASP Program and the COVID-19 Refund Modification Program, if applicable.
Be Sure to Send Written Correspondence
Consider wrapping up the email or letter after the conversation, even if a follow-up is unnecessary; the key ideas and arrangements are worth recording. This will provide proof of your communications.
Ensure that You Have Records
Create a record of when you spoke to representatives, what time it was, and who you spoke to.
Supplemental Resources
If you have any questions, contact a housing adviser approved by the United States Department of Housing and Urban Development (HUD).
You should always follow these actions to communicate your requirements and concerns with your mortgage servicer and to investigate available options for managing your mortgage.
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What are the eligibility requirements for the VASP Program?
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The Veterans Affairs Servicing Purchase (VASP) Program was conceived to support those Veterans in serious hardship circumstances.
Eligibility requirements can be summarized as follows:
Eligibility requirements for the VASP Program
Type of Loan: The application must ensure that the loan declared is a guaranteed VA.
Severe Financial Hardship: The applicant must prove that he is experiencing severe economic hardships, including income depression, loans to be paid out, and any other troubles that may arise and needs funding assistance.
Exhaustion of Other Options: The borrower is required to have thoroughly tried out all the existing options that help to retain the home, including but not limited to the following:
- Forbearance agreements
- Repayment plans
- Loan modifications
Consumer Evaluation: The mortgage servicer ascertained eligibility, assessed the borrower, and, if there are other alternatives and the borrower satisfies them, considered the VASP Program an alternative.
Documentation: The borrower may be required to provide documentation, for example, income claim of financial hardship, claim of filed expenses report, and other documents supporting the claim.
Additional Considerations
No Direct Application: Veterans do not fill out applications while applying for the VASP Program. Instead, ask their mortgage servicer for help and start the evaluation process.
Timing: Since the program goal is to assist and target arris losses, this is where and why timely communication with the servicer is important.
If you think you might be eligible, contact your mortgage lender to explain your situation and the following procedures.
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