During the COVID-19 pandemic, the government started many mortgage forbearance programs, which involved putting unpaid mortgage amounts at the end of the loan without collecting interest.
Many people signed up for this because it was an excellent deal.
The VA had a similar program to this, but then it suddenly ended.
Suddenly, borrowers who heard told that their payments were attached to the end of the loan were told that they were due now as a balloon payment or would face foreclosure.
This left many veterans in a horrible situation where the rug has been pulled out from under them. Certain senators and congress asked Biden ministration to halt the foreclosure process until the Veterans Administration can figure out a new program to help these borrowers.
Recently, the Biden ministration did just that, announcing that these foreclosures on veterans loans will stop until the new programs can be implemented.
The National Consumer Law Center has praised this move, as have debt and bankruptcy attorneys nationwide. More on this story as it develops.
This pause will give VA borrowers a much-needed opportunity to access the upcoming VA Servicing Purchase (VASP) program. Through VASP, the agency will modify and purchase qualifying loans in default to provide meaningful payment assistance to VA borrowers in financial distress. Consumer advocates at the National Consumer Law Center (NCLC) and the Center for Responsible Lending (CRL), along with U.S. Senators Jon Tester (Mont.), Sherrod Brown (Ohio), Jack Reed (R.I.), and Tim Kaine (Va.), had urged the VA to pause foreclosures until its VASP program is effective and widely available. – National Consumer Law Center, November 20, 2023