The Department of Veterans Affairs (VA) has issued guidance urging mortgage servicers to implement a targeted moratorium on foreclosures for Veterans with VA-guaranteed loans through December 31, 2024. This measure aims to help Veterans and their families remain in their homes beyond the current foreclosure moratorium ending on May 31.
The new foreclosure moratorium will support the implementation of the Veterans Affairs Servicing Purchase (VASP) program, a last-resort tool for qualified Veterans facing severe financial hardship. Under VASP, the VA will purchase modified loans from loan servicers and place them in the VA-owned portfolio as direct loans, making them more affordable for Veterans. VASP launches on May 31, with full implementation required by October 1, 2024.
Veterans experiencing financial difficulties are encouraged to contact their mortgage servicer to explore home retention options. For additional assistance, they 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, including offering repayment plans, loan modifications, and more,” said Under Secretary for Benefits Josh Jacobs. “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.”
The VA offers several home retention options:
- **Forbearance Agreements**: Temporarily reducing or pausing payments for short-term financial difficulties.
- **Repayment Plans**: Arranging plans to gradually catch up on missed payments.
- **Loan Modifications**: Adjusting loan terms for more manageable monthly payments.
- **VASP**: Providing a fixed 2.5% interest rate once all other home retention options are exhausted.
The targeted foreclosure moratorium applies to all VA-guaranteed loans unless certain conditions are met: if the property is vacant or abandoned; if the borrower does not wish to retain homeownership or avoid foreclosure; if no payment has been received for at least 210 days and there is no response from the borrower; or if no viable home retention option exists after evaluation.
VA and the Biden-Harris Administration emphasize their commitment to preventing foreclosures among Veterans. The VA previously extended its COVID-19 modification program through September 30 and assisted over 145,000 Veterans in avoiding foreclosure in 2023.
For further information and assistance, visit VA’s foreclosure support and prevention website.
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