WASHINGTON, DC – The Department of Veterans Affairs (VA) has taken a decisive step to support veterans and servicemembers by halting foreclosures for six months on VA Loans. This action follows an investigative report by NPR revealing that many veterans who utilized COVID forbearance are now facing potential home loss.
The VA’s decision comes as a response to findings that thousands of veterans are at risk of foreclosure due to COVID-related forbearance. The forbearance program, established by Congress during the pandemic, allowed those affected by income loss to defer mortgage payments. However, in October 2022, the VA ended a crucial part of this program that facilitated homeowners in resuming their mortgage payments, leaving many veterans vulnerable to foreclosure.
Currently, approximately 6,000 veterans with VA loans who had availed of COVID forbearances are in the foreclosure process, with an additional 34,000 being delinquent, according to ICE Mortgage Technology. In light of these distressing figures, a group of Democratic senators, including Sherrod Brown, Jon Tester, Jack Reed, and Tim Kaine, urged the VA to immediately halt foreclosures, emphasizing that the loss of homes for these veterans was never Congress’s intention.
In its statement, the VA emphasized its commitment to assisting veterans with their loans while introducing a new home retention program. Under this program, the VA intends to purchase the loans from current holders, modify them, and manage them within a VA-owned loan portfolio. This initiative aims to provide tailored assistance to veterans facing severe financial challenges, enabling them to adjust their loans and monthly payments to avoid losing their homes.
VA Press Secretary Terrence Hayes highlighted the organization’s priority of helping veterans and their families maintain their homes. Additionally, VA’s Under Secretary for Benefits, Josh Jacobs, encouraged any veteran struggling with loan payments to seek assistance through the VA’s housing assistance resources.