VA Urges Mortgage Servicers to Halt Foreclosures for Veterans Through 2024

US Department of Veterans Affairs

WASHINGTON, D.C. — The Department of Veterans Affairs (VA) has issued new guidance urging mortgage servicers to pause foreclosures on VA-guaranteed loans through the end of 2024. This measure aims to help Veterans and their families stay in their homes beyond May 31, when the current foreclosure moratorium ends.

This targeted foreclosure moratorium will provide critical relief while mortgage servicers implement the Veterans Affairs Servicing Purchase (VASP) program. Set to launch on May 31, VASP is designed as a last-resort tool for Veterans facing severe financial hardship. Under this program, the VA will purchase modified loans from servicers and transform them into direct loans with more affordable terms for Veterans. Mortgage servicers are expected to fully implement the program by October 1, 2024.

Veterans experiencing financial difficulties are encouraged to contact their mortgage servicers to explore all available home retention options. For additional help, Veterans can reach out to the VA directly at 877-827-3702 or visit the VA Home Loans website.

“When a Veteran falls on hard times, we work with them and their loan servicers every step of the way to help prevent foreclosure,” said Josh Jacobs, Under Secretary for Benefits. “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.”

VA offers several home retention options:

  • Forbearance Agreements: Temporarily reduces or pauses payments for short-term financial difficulties. Loan payments are still owed at the end of the forbearance period.
  • Repayment Plans: Arranges plans for catching up on missed payments gradually.
  • Loan Modifications: Adjusts loan terms to make monthly payments more manageable.
  • VASP: For Veterans who have exhausted all other options, VASP offers a fixed 2.5% interest rate to ensure consistent and affordable payments.
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The targeted moratorium applies to all VA-guaranteed loans unless:

  1. The property is vacant or abandoned.
  2. The borrower does not wish to retain homeownership or avoid foreclosure.
  3. No payments have been received for at least 210 days, and the borrower is unresponsive.
  4. The servicer has evaluated all options but determined no viable solution exists.

This moratorium could have significant implications. By pausing foreclosures, it provides breathing room for Veterans struggling financially, allowing them time to stabilize their situation without the imminent threat of losing their homes. The introduction of VASP further enhances these efforts by offering a sustainable long-term solution for those in severe distress.

These measures aim to support Veterans through financial challenges. By working closely with mortgage servicers and providing a range of options, the VA aims to keep more Veterans in their homes, ensuring they receive the stability and support they deserve. For additional information, visit VA’s foreclosure support and prevention website.

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