Action to save veterans’ homes was virtuous, but should have come earlier
Congress did not pass emergency measures to assist veterans during the pandemic simply to penalize them and force them into bankruptcy and foreclosure four years later.
Kudos to four Democratic senators and the Department of Veterans Affairs for taking action to correct a government blunder that left tens of thousands of veterans of the United States armed services on the verge of bankruptcy and losing their homes.
In 2020, the CARES Act authorized the creation of the VA’S COVID-19 Veterans Assistance Partial Claim Payment program (VAPCP). It allowed veterans with home loans from the VA who lost their income due to COVID to skip mortgage payments for six or 12 months without accruing additional interest or hurting their credit rating. It also authorized loan modifications to help veterans get back on track with affordable loan repayment options after recovering from a Covid-related financial hardship. Some borrowers were even led to believe that they could simply tack the months of skipped payments onto the end of their existing loan, extending the loan term without penalty.
However, in October 2022, the VAPCP was canceled, leaving borrowers in a bind and with few options beyond a refund modification program that requires them to modify their loans and pay current market interest rates. A new VA loan repayment program, Veterans Assistance Servicing Purchase (VASP), is in the works but is still months away from full implementation, leaving 40,000 veterans facing bankruptcy or foreclosure.
Canceling VAPCP was shortsighted and never should have been allowed to occur in the first place. At the very least, the VA should have done more to ensure that veterans seeking assistance during the pandemic had the information they needed to make informed decisions about which assistance programs to take advantage of, the timeline for taking advantage of the programs and how it would affect their home loans moving forward.
In addition to 40,000 veterans facing imminent financial calamity, as many as 100,000 veterans have been forced to accept higher interest rates and higher monthly payments.
Congress did not pass emergency measures to assist veterans during the pandemic simply to penalize them and force them into bankruptcy and foreclosure four years later. If the legislative language authorizing VAPCP was inadequate to meet the needs of our veterans, Congress and the VA should have found a solution prior to its expiration.
The brave Americans who volunteered to risk their lives in service to our country should not be penalized for trusting the government when it promised affordable repayment options at the conclusion of the COVID emergency.
Last week, the looming crisis prompted a group of Democratic senators to send a letter to the VA urging it to “implement an immediate pause on all VA loan foreclosures” until VASP is available, and borrowers can be evaluated to see if they qualify.
“With each additional day that passes, risks mount for borrowers who are facing foreclosure while they wait for a solution from VA,” said the letter, whose signatories include Veterans Affairs Committee chairman Jon Tester, D-mont.; Armed Services Committee chair Jack Reed, D-R.I.; Banking and Finance Committee chairman Sherrod Brown, D-ohio; and Tim Kaine, D-VA. “Without this pause, thousands of veterans and servicemembers could needlessly lose their homes through no fault of their own. This was never the intent of Congress.”
In a display of good governance, the senators also acknowledged that congressional action may be necessary to meet the needs of veterans and requested that the VA provide them with information on “any legislative changes (that) are needed to ensure users of the VA home loan program are afforded the same protections as those with other federally backed loans.”
This week, the VA responded to that request by announcing that it would halt home foreclosures for veterans and servicemembers with VA loans through May 31, 2024.
“Helping veterans and their families stay in their homes is a top priority at VA,” said VA press secretary Terrence Hayes in a statement. The statement went on to explain that by pausing payments, the VA can “continue assisting veterans with their loans while we launch our newest home retention option.”
The VA’S undersecretary for benefits, Josh Jacobs, also issued a statement promising that, “We at VA will do everything in our power to help veterans stay in their homes.” Jacobs encouraged veterans who are struggling with making their payments to visit va.gov/housing-assistance or call 877-8273702 to learn about new options that may be available to them.
The Democratic senators who sent the letter demanding action from the VA should be applauded for acting for the good of our veterans and for acknowledging that additional legislative action may be necessary moving forward.
While we are heartened to see that the VA responded quickly to the call from the senators, it should have sounded the alarm and taken action to resolve the problem last year when the VAPCP was set to expire. If congressional action was necessary, the VA could have called for legislation months ago. After all, the VA was warned of the impending calamity by veterans organizations, housing advocates and even representatives of the mortgage industry.
Our veterans deserve better, especially from those who are supposed to represent them.
Congress and the VA should work swiftly together to pass the necessary legislation and regulations to protect our veterans from bankruptcy and foreclosure caused by the pandemic.
Finding ways to prevent people from losing their homes through no fault of their own, let alone Americans who wear the uniform, is the least any American should expect of their government.