VA extends foreclosure moratorium through end of 2024

Last week, the Department of Veterans Affairs (VA) announced on Wednesday that it has called on mortgage servicers to extend the moratorium on foreclosures for VA-guaranteed loans through December 31, 2024, a move that would help Veterans and their families stay in their homes beyond the end of the current foreclosure moratorium that was to expire on May 31, 2024.

The VA had previously requested the foreclosure moratorium while these companies implement a new program to help struggling veterans amid complaints of veterans’ struggles because there was no program available to succeed a partial claim option offered during the COVID-19 pandemic. The VA helped more than 145,000 Veterans and their families avoid foreclosure in 2023 alone.

“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,” Josh Jacobs, the VA’s undersecretary for benefits, said in a prepared statement.

The VA unveiled the Veterans Affairs Servicing Purchase (VASP) program in April, an option to prevent foreclosure actions against military members facing financial hardship due to the COVID-19 pandemic. This new, targeted foreclosure moratorium will help ensure that Veterans and their families are able to stay in their homes while mortgage servicers implement the VASP program – a new, last-resort tool for qualified Veterans experiencing severe financial hardship. Through VASP, VA will purchase qualified Veterans’ modified loans from their loan servicers and then place them in the VA-owned portfolio as direct loans at a fixed 2.5% interest rate – making the loans more affordable for Veterans. VASP officially launches on May 31 and mortgage servicers must have it fully implemented by October 1, 2024.

“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.”

This targeted foreclosure moratorium will apply to all VA-guaranteed loans unless 1) the loan is secured by property that is vacant or abandoned, 2) the servicer has documented that the borrower desires neither to retain homeownership nor avoid foreclosure, 3) the servicer has not received a monthly payment for at least 210 days, and the borrower is not responding to the servicer’s outreach attempts, or 4) the servicer has evaluated the borrower for all home retention options but has determined that no home retention option, including VASP, or alternative to foreclosure will work for the borrower.

Veterans facing financial hardship should contact their mortgage servicer and work with them to explore all available home retention options. For additional assistance, Veterans can always contact VA directly by calling 877-827-3702, option 4.

For additional assistance, visit VA’s www.va.gov/housing-assistance/home-loans/trouble-making-payments