NPR’s Imani Khayyam
The chairman of the U.S. Senate Banking and Veterans Affairs Committee introduced a bill Thursday aimed at helping veterans at risk of losing their homes due to the VA’s abrupt end to the coronavirus aid program in 2022.
The bill, which they are calling the Veterans Housing Stabilization Act, would let the Department of Veterans Affairs reopen the program that thousands of veterans have used to skip mortgage payments as they face pandemic-related financial problems.
“Our veterans who received home loan guarantee benefits should have a viable option to resume payments and keep own home.” He is the sponsor of the bill. and Sen. Sherrod Brown, D-Ohio, chairman of the Banking Committee.
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Like millions of other Americans, veterans have taken advantage of so-called COVID-19 mortgage forbearance policies, which allow homeowners to stop making mortgage payments for six to 18 months. This was established by Congress after the outbreak for people who lost income. NPR survey Tens of thousands of veterans were suddenly unable to resume payments after the Veterans Administration ended key parts of the VA loan program in November.
One of the affected homeowners is Marine Corps veteran Jason Myers.
Myers has served four tours in Iraq, Afghanistan and Syria. He lost a sales job during the pandemic and had to put it on hold because he couldn’t afford his mortgage. Like many veterans, he was told the missed payments would be rolled over but then the Veterans Administration ended part of the program that allowed homeowners to do so, leaving Myers and thousands of others facing foreclosure. .
“It’s horrible. I’m scared to death because we’re about to lose our home,” Myers told NPR in November.
After NPR first reported the problem, VA halted foreclosures and Announced a 6-month suspension While it is working on rolling out a fix.
Sponsors of Thursday’s bill said their legislation could play a key role. That would clarify the VA’s authority to restart the program, which was closed in 2022.
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Brown said the bill “will deliver on our commitment to veterans and service members today and tomorrow by providing affordable housing options for homeowners.”
The Veterans Administration’s partial claims payment program allows mortgage companies to bundle missed payments due to deferrals and effectively shift them to the back of the loan term so homeowners can resume regular mortgage payments. – Payment of the same principal and interest at the same interest rate as before the extension. Missed payments can be repaid when the homeowner sells the home or refinances at a later date.
VA told NPR it concluded it no longer has the authority to do so after October 2022. Industry and housing experts disagree, warning the VA that ending the program would leave thousands of veterans stranded given a historic spike in mortgage rates. This is an affordable way to repay your loan. But the Veterans Administration ended the program anyway and didn’t replace it.
VA-backed loans have been a cornerstone part of benefits provided to veterans since the 1940s. But as of October 2022, VA loans offer homeowners behind on payments a worse option than mortgages backed by FHA or the Federal Housing Administration. The government-sponsored enterprises are Fannie Mae and Freddie Mac.
“Our veterans and active duty military need to be able to pay off their mortgages. Our bill will ensure they can do that and have the same options as other federally backed loans,” Tester said.
The Veterans Administration guarantees these loans, but they are actually issued and administered by private lenders who appear to support the Senate bill.
“We think partial claims are important and necessary for the deferrals in the VA program,” said Justin Wiseman of the Mortgage Bankers Association, which has called on the VA to make it more affordable for homeowners. to get the current life.
In addition to the new legislation, the VA said it is developing a new loan modification program that could help thousands of veterans who are behind on their loans or in the foreclosure process before the foreclosure moratorium.
At a news conference on Tuesday, Veterans Affairs Secretary Dennis McDonald said he was eager to work with Congress to address forbearance and promised that the VA’s own solution would be ready by the summer.
“Each of these steps is about ensuring that our veterans facing this difficult challenge know that we have support for them and that we can help them get through this post-pandemic period,” McDonald said. “In this case, I urge our veterans to contact us so we can address any questions, concerns or confusion they have.”
But while homeowners on the verge of foreclosure get a reprieve, there’s another group of vets who may not get any help.
Many people who get VA loans end up in loan modification Monthly payments are much higher as the Veterans Administration ends its pandemic relief program. The Veterans Administration has not told NPR how many veterans this has happened to, or whether it will do anything to help them. In an interview with NPR, Senator. Tester acknowledged that the original bill did not target these veterans, but he vowed that they would be rehabilitated.
“The VA needs to keep track of this and we will continue to put pressure on them,” Tester said.
NPR’s Imani Khayyam
As for Mississippi veteran Jason Miles, his mortgage company told him back in November that he would have to make a lump sum of years of missed payments in order to make his loan current. .
“Essentially, you have to pay $20,000 or you’re going to foreclose.”
Today, Myers is a teacher and coach at Clinton Christian Academy in Clinton, Mississippi. But even after selling some furniture and some guns, he couldn’t make a lump sum to avoid losses. The house where he lives with his wife and three children.
However, he can continue to make his monthly mortgage payments, but his mortgage company still won’t accept the monthly payments unless he somehow gets a current loan again.
Now the Veterans Administration has put a moratorium on foreclosures, giving Myers some breathing room. He just hopes the VA can actually come up with a solution.
“I’m still very nervous about it,” he said, but added, “I have hope now.”