The Department of Veterans Affairs has issued guidance that strongly encourages mortgage servicers to implement a targeted moratorium on foreclosures for veterans with VA-guaranteed loans through Dec. 31, 2024.
This will help veterans and their families stay in their homes beyond the end of the current foreclosure moratorium, which will end on Friday, May 31.
This new, targeted foreclosure moratorium will help ensure that veterans and their families can stay in their homes while mortgage servicers implement the Veterans Affairs Servicing Purchase program - a new, last-resort tool for qualified veterans experiencing severe financial hardship, VA said in a release.
“When a veteran falls on hard times, we work with them and their loan servicers every step of the way to help prevent foreclosure, including offering repayment plans, loan modifications, and more,” said Under Secretary for Benefits Josh Jacobs. “We’re calling on mortgage servicers to follow a targeted foreclosure moratorium so we can make sure that veterans get the support they need to stay in their homes.”
Through VASP, VA will purchase qualified veterans’ modified loans from their loan servicers and then place them in the VA-owned portfolio as direct loans – making the loans more affordable for veterans. VASP officially launches on May 31 and mortgage servicers must have it fully implemented by Oct. 1, 2024.
Veterans facing financial hardship should contact their mortgage servicer and work with them to explore all available home retention options. For additional assistance, Veterans can always contact VA directly by calling 877-827-3702, option 4, or by visiting the VA Home Loans website for additional information.
When a veteran experiences financial hardship, VA has a range of options to help stay in their homes. VA’s home retention options include forbearance agreements, repayment plans, and loan modifications.
Once a veteran has exhausted all other home retention options, they may qualify for VASP. With VASP, qualified borrowers will have a fixed 2.5% interest rate, which will provide consistent, affordable payments for the remainder of their loan.
This targeted foreclosure moratorium will apply to all VA-guaranteed loans unless the loan is secured by property that is vacant or abandoned; the servicer has documented that the borrower desires neither to retain homeownership nor avoid foreclosure; the servicer has not received a monthly payment for at least 210 days, and the borrower is not responding to the servicer’s outreach attempts, or the servicer has evaluated the borrower for all home retention options but has determined that no home retention option, including VASP, or alternative to foreclosure will work for the borrower.
According to VA, it helped more than 145,000 veterans and their families avoid foreclosure in 2023 alone For more information on the targeted foreclosure moratorium, visit here.
Reach Julia LeDoux at Julia@connectingets.com .
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