Veterans Are Facing Foreclosure By The Thousands And It’s Not Their Fault. The VA Could Help But Where Are They?

Veterans Are Facing ForeclosureAmerican military veterans are facing foreclosure by the thousands.

Here is one such story about how the VA is failing our veterans facing foreclosure.

Ray Queen and his wife, Becky live on a small farm in rural Oklahoma with their two young kids. Ray is an Army veteran who was wounded in Iraq. 

Since the 1940s, the federal government has helped veterans like Ray Queen buy homes through its VA loan program, run by the Department of Veterans Affairs.

More Veterans Could Be Homeless Thanks To The VA

Veterans are facing foreclosureBut now the VA and his servicer, Mr. Cooper have put this family on the brink of losing their house.

Ray Queen told NPR:

“I didn’t do anything wrong. The only thing I did was trust a company that I’m supposed to trust with my mortgage.”

The Queens took advantage of a COVID mortgage forbearance like millions of other homeowners did. The congressionally approved program allowed homeowners to skip mortgage payments. Congress set up the program after the pandemic hit for people who lost income.

Veterans are facing foreclosureUnfortunately, thousands of veterans who took a forbearance are now at risk of losing their homes. The VA is trying to figuring out how to fix the problem. However, for many it could be too late.

For the Queens, this all started in September of 2021. Becky’s mother died of COVID-19. As a result, she had to take an extended leave from work and lost her job.

So last year, with their savings dwindled. The couple says they called their mortgage servicer, Mr. Cooper. Mr. Cooper told them they could skip six months of payments. And once they got back on their feet and could start paying again. Ray and Becky Queens say they were told that they wouldn’t owe the missed payments in a big lump sum.

Beck Queen told NPR:

“I very specifically asked ‘how does this work? They said we’re taking all of your payments, we’re bundling them, and we’re putting them at the end.”

In other words, the missed payments would be moved to the back end of their loan term. Once the forbearance was over, they could resume making their normal mortgage payment again.

But that’s not how it worked out.

Veterans Are Facing Foreclosure Thanks To The VA

The VA ended the so-called Partial Claim Payment program in October 2022. This happened even though the mortgage industry and veterans groups all warned the VA not to end the program. The groups warned the VA that thousands of homeowners needed to catch up on missed payments. They told the VA that because interest rates had risen so much that many veterans couldn’t afford to get back on track any other way.

The Queens tried to come off their forbearance in February of this year and resume paying their mortgage. They were both working again. However, they ran into delays with Mr. Cooper.

In September, Mr. Cooper told the couple they needed to come up with more than $22,000. Mr. Cooper told them they had 3 options. 1) pay $22,000 2) sell their house or 3) get foreclosed on.

Mr. Cooper pointed the finger at the VA. The company claims the VA needs better loss-mitigation options.

VA Claims It Has A Plan. But It Could Be Too Late

Veterans Facing ForeclosureThe Department of Veterans Affairs says it had no choice but to end the program.

Some in the industry think the VA did, in fact, have the authority to extend the program. But either way, it ended it.

The VA is working on a new program to replace the old one. It will work in a different way but to similar effect. It’s designed to save people from foreclosure. Bell says it’s going to take four to five months to get it up and running.

That’s too long for many of those 6,000 VA homeowners already in the foreclosure process. Not to mention the many more who are delinquent.

Already, data shows that more VA homeowners have been heading into foreclosure since the VA ended its PCP program. However, the same is not true for FHA loans or loans backed by Fannie Mae or Freddie Mac.

Read More About Mortgage Issues On MFI-Miami

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