Tester Sounds Alarm, Demands Biden Administration Take Immediate Action to Protect Veterans Facing Foreclosure
Senator leads effort pressing VA to ensure veterans using VA home loans can remain in their homes
U.S. Senator Jon Tester, Chairman of the Senate Veterans’ Affairs Committee, is sounding the alarm demanding the Department of Veterans Affairs (VA) take immediate action to protect thousands of veterans and servicemembers who used the VA home loan guarantee benefit from losing their homes through foreclosure.
“The Biden Administration needs to act now to address this crisis facing our men and women who risked their lives serving this country and now face foreclosure through no fault of their own,” said Tester. “Our veterans earned their home loan guarantee benefit, and now they’re having the rug pulled out from underneath them. The Department needs to act now to right this wrong and cut bureaucratic red tape to ensure our veterans, servicemembers, and their families can stay in their homes.”
Veterans and servicemembers with VA home loans who faced financial difficulties during the COVID-19 pandemic used forbearance to pause their mortgage payments without penalty and remain in their homes. VA implemented this forbearance and assured veterans they would not be required to make up their missed payments in total when this forbearance ended. While VA previously offered solutions to help borrowers exit forbearance and get back on track with their payments, some of those authorities expired when the pandemic ended. Veterans now have fewer options to bring their mortgages current. These limited options leave thousands of veterans who took forbearance vulnerable to losing their homes.
Tester teamed up with U.S. Senators Sherrod Brown (D-Ohio), Chairman of the Senate Banking Committee, Jack Reed (D-R.I.), Chairman of the Senate Armed Services Committee, and Tim Kaine (D-Va.) to call on VA Secretary Denis McDonough to address this looming crisis facing veterans who used their VA home loan guarantee benefits.
“[Tens] of thousands of veterans and servicemembers are left with no viable options to get back on track with payments and save their homes. Stories from across the country show that this is already having severe consequences for veterans and their families,” Tester and the Senators wrote to VA Secretary McDonough. “With each additional day that passes, risks mount for borrowers who are facing foreclosure while they wait for a solution from VA.”
Thousands of veterans who took forbearance are now are left with worse options than available to borrowers with Federal Housing Administration (FHA) loans and loans backed by Fannie Mae and Freddie Mac, which allow borrowers who missed payments to make them up at the end of the term.While VA is currently designing a new loss mitigation solution that will help more veterans lower their payments and remain in their homes, the guidance on the program’s terms is not available yet and will take time for lenders and servicers participating in the VA home loan to implement.
The Senators concluded their letter by urging VA to swiftly take action to ensure veterans and servicemembers don’t lose their homes and are afforded the same protections as those with other federally-backed loans, writing: “We urge you to extend the availability of the refund modification program to ensure it is available to help the borrowers it can. We also request that you direct servicers to implement an immediate pause on all VA loan foreclosures where borrowers are likely to be eligible for VA’s new Veterans Assistance Servicing Purchase (VASP) program until it is available and borrowers can be evaluated to see if they qualify. Without this pause, thousands of veterans and servicemembers could needlessly lose their homes through no fault of their own.”
Read the Senators’ full letter HERE.