John Plahovinsak
The Department of Veterans Affairs (VA) existing Foreclosure Moratorium Program officially ended on Friday, May 31, 2024. However, the VA has taken steps to extend the Moratorium Program until December 31, 2024.
The VA had “strongly encouraged” mortgage lenders on May 29, 2024, to extend the existing veterans’ foreclosure moratorium. The VA established
a new VA Servicing Purchase (VASP) Program on May 31, 2024, which is designed to assist more than 40,000 veterans to remain in their homes.
“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 the VA Under Secretary for Benefits Josh Jacobs.
“We’re calling on mortgage services to extend a targeted foreclosure moratorium,” continued Secretary Jacobs, “so we can make sure that veterans get the support they need to stay in their homes.”
When the COVID-19 pandemic struck, Congress authorized the VA to establish a housing process to assist many families faced with financial difficulties. This process was called “forbearance” and allowed veterans a temporary pause on VA home loan mortgage payments.
When Congress’ authorization for the VA’s “forbearance” process, expired, the mortgage lenders were forced to collect “lump sum” payments from the veterans. The Clermont Sun Newspaper detailed what transpired in their November 23, 2023, and April 25, 2024 issues.
The new VASP Program will purchase qualified veterans’ modified loans from loan servers and place them in a VA portfolio as direct loans, making the loans more affordable for veterans. With the VASP Program, qualified borrowers will have a fixed, flat lending interest rate of 2.5 percent.
The VASP Program was launched on May 31, 2024, and the mortgage servicers have until October 1, 2024, to fully implement the program.
Officials from the VA indicated that the VASP creates a consistent and affordable payment for the remainder of the respective mortgage loans to qualifying veterans.
Over the past year, the VA has been able to help more than 145,000 veterans and their families retain their homes and avoid foreclosure. The VA has backed more than 3.7 million active home loans, including more than 400,000 new loans from 2023.
On February 1, 2024, Senators Sherrod Brown and Jon Tester introduced Senate Bill 3728, the Veterans Housing Stability Act. This bill would “modify the administration of housing loans of the Department of Veterans Affairs to prevent or resolve default under such laws and for other purposes.”
This proposed bill by Senators Brown and Tester would prevent veterans and service members with VA home loans from losing their homes when they are working to catch up on their mortgage payments. “The VA and other federally-backed mortgage programs have implemented this policy in the past,” said Senator Brown.
“Our veterans and service members risked their lives and gave up time with their families to protect us,” concluded Brown. “They deserve to be able to stay in their homes while working to catch up on payments.”
Veterans can call the VA at 877-827-3702 and enter option 4 for more information on the new VA Servicing Purchase (VASP) Program to learn about the options for retaining their homes.
My Opinion: I wrote about this situation on two (2) occasions. Senators Brown and Tester responded with introducing the Veterans Housing Stability Act legislative bill. The VA finally responded and initiated the VASP Program on May 31, 2024, to address the problem for our veterans.
Hopefully, the VASP Program is the salvation for over 40,000 veterans as they cope with a situation initially caused by the VA!
BioSketch: John Plahovinsak is a 32-year retired Army veteran who served from 1967 to 1999. He is the Disabled American Veterans (DAV) Department of Ohio’s Hospital Chairman and Adjutant of DAV Chapter #63 (Clermont County) can be reached at: plahovinsak@msn.com.