VA has called upon all mortgage servicers to pause all foreclosures of VA-guaranteed loans through May 31, 2024. This does not mean that every mortgage servicer will follow VA’s wishes. However, VA is making concerted nationwide effort to work with individual servicers on workable home retention solutions for Veterans, particularly Veterans who are behind in the mortgage payments.
Thousands of veterans have been in danger of losing their homes because of the end of the Veterans Assistance Partial Claim Payment program in late 2022. The program, established by Congress, allowed individuals to skip some mortgage payments during the COVID-19 pandemic, with the promise of making up those payments later. But when it was canceled, some mortgage companies demanded all of the back payments be paid quickly, leading to financial problems for those families.
VA has extended the COVID-19 Refund Modification program through May 31, 2024. This extension will allow Veterans to obtain a zero-interest, deferred-payment loan from VA to cover missed payments and modify their existing VA-guaranteed loan to achieve affordable monthly payments for the duration of this extension.
What VA is ultimately driving toward here is the finalization and launch of a new home retention option, the VA Servicing Purchase (VASP) program. Through VASP, VA will purchase defaulted VA loans from mortgage servicers, modify the loans, and then place them in the VA-owned portfolio as direct loans. This will hopefully empower VA to work with Veterans experiencing severe financial hardship to adjust their loans – and their monthly payments – so they can keep their homes.
Veterans struggling in making their mortgage payments, on VA-guaranteed loan, please call 1-888-827-3702 to speak with a VA loan technician. The loan technicians are empowered to work with Veterans and their families in financial distress to discuss (and hopefully identify) available home retention options such as repayment plans, special forbearance, loan modification, and more.