VA Calls On Mortgage Companies To Pause Foreclosures

A group of Democratic senators wrote a letter to the VA implying that the agency’s ending of the veterans’ program contradicted the intent of Congress.

After NPR’s investigative report on the thousands of veterans who were about to lose their homes due to foreclosure, the Department of Veterans Affairs is taking action. Thousands of veterans took advantage of a COVID forbearance program, which paused or reduced their mortgage payments for a year but stipulated that they would have to catch up on the missed or reduced payments once the period was over. The VA had set up a way for veterans to make affordable payments. Yet, inexplicably, that portion of the program was ended in October 2022, leaving veterans at risk of losing their homes. 

The VA now has a new program to fix its oversight, but it will take around four or five months to get off the ground. That length of time is not sufficient for veterans who are currently in the middle of the foreclosure process, NPR reports. According to data from ICE Mortgage Technology, 6,000 veterans are currently in the process of having their homes foreclosed on, and 34,000 are currently delinquent on their payments. A group of senators have sent a letter to the VA imploring them to put a stop to the foreclosures immediately. 

Democratic senators Tim Kaine, Sherrod Brown, Jon Tester, and Jack Reed wrote a letter on Nov. 16 implying that the results of the VA’s ending of the program contradicted the intent of Congress for the program.

“Without this pause, thousands of veterans and servicemembers could needlessly lose their homes,” the senators wrote. “This was never the intent of Congress.”

In response, the VA has called upon mortgage companies to pause foreclosures on loans the VA holds.

VA Press Secretary Terrance Hayes said in a statement on Nov. 17, “Helping Veterans and their families stay in their homes is a top priority at VA.”

He added, “We are calling on mortgage servicers to pause foreclosures of VA-guaranteed loans through May 31, 2024. This will empower us to work with veterans experiencing severe financial hardship to adjust their loans – and their monthly payments – so they can keep their homes.”

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