The Department of Veterans Affairs has extended a moratorium on foreclosures . The move gives mortgage companies more time to get a new program up and running to rescue veterans who were facing foreclosure through no fault of their own.
鈥淲e鈥檙e 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,鈥� Under Secretary for Benefits Josh Jacobs said in a statement.
The VA initially asked mortgage companies last year to after an that the VA had abruptly ended a key part of a pandemic mortgage relief program, stranding tens of thousands of vets who were still in the middle of it with no affordable way to get current on their home loans. The end-date on that foreclosure moratorium was May 31st. Mortgage companies will now have until the end of 2024 to implement the VA鈥檚 new rescue plan 鈥� the It鈥檚 welcome news to veterans stuck in limbo.
鈥淚t relieved the pressure off of me that I know I'm not gonna wake up one morning and see a sign outside and see a sheriff at the front door telling me to get the hell out,鈥� said Vietnam-era Marine Corps veteran Edward O鈥機onner.
鈥淏ut at the same time, I hope that it gives the VA enough time for them to get their head and ass wired together,鈥� O鈥機onner said in exasperation. 鈥淵ou gotta understand it gets me frustrated.鈥�
Paused payments
After O鈥機onnor鈥檚 wife lost her job during the pandemic, the VA told him he could pause mortgage payments on his VA-backed home-loan through what鈥檚 called a forbearance. Many vets were told they could simply add the missed payments to the back of their loan after their financial hardship was over. But VA ended that part of the program while thousands of vets were still in forbearance and failed to set up an affordable alternative to let them resume paying.
Suddenly vets like O鈥機onnor got calls demanding all the missed payments at once. He said he鈥檚 now more than $61,000 behind and sees VASP as his only way to keep his home. The new six-month moratorium is comforting, but O鈥機onnor says neither his mortgage company nor his contact at the VA can explain to him when VASP will be up and running and whether he will qualify for the help.
鈥淪o I'm kind of in the dark right now and it's kind of making me a little bit leery. But the only thing I have faith in is the VA. 鈥� It's just that I'm still racking up month after month after month of payments that I'm behind and I'm afraid,鈥� he said.
Many other veterans are worried. 鈥淎 six-month window, like that's great, but six months is not a lot of time,鈥� said Iraq vet Josiah Mena.
Mena is also watching his debt pile up, with the threat of imminent foreclosure if the VA moratorium ends. He鈥檚 been offered alternatives that would involve paying all his arrears at once which he can鈥檛 afford; at this point he said that鈥檚 $71,000. Or his mortgage company keeps offering him a loan modification at a much higher interest rate that he said would add $1,300 to his monthly payment. Both Mena and O鈥機onner said they couldn鈥檛 afford those much higher-cost options their lenders have been trying to enroll them in. Mena said the only way he鈥檒l be able to keep his family of five in their Long Island home is VASP, which he said representatives for his mortgage company tell him they still don鈥檛 have up and running yet.
鈥淎nd then when I asked them are they gonna in the future? They said we're not sure. 鈥� he said.
Mena said he calls his mortgage company once a week and he鈥檚 also in touch with a VA loan adviser. He said the VA rep has been more knowledgeable and encouraging.
鈥淪o he just told me to just keep on trucking, and keep on checking in on them,鈥� Mena said.
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