Published: January 2023

Allies urge expansion of loss mitigation options under VA Home Loan Guaranty

Consumer, housing and veterans’ advocates wrote to the Department of Veterans Affairs urging the agency to expand the loss mitigation options available under the VA Home Loan Guaranty Program to help veteran borrowers avoid foreclosure.

An estimated 100,000 to 130,000 veteran borrowers with mortgages backed by the Department of Veterans Affairs (VA) are seriously delinquent (three or more payments past due). At the same time, the loss mitigation options currently available to veteran borrowers are fewer and significantly less effective than those available to other government-insured borrowers. Consumer Action joined 18 other advocacy groups in urging the VA to bring its program into alignment with the assistance provided by other government agencies. Specifically, the groups recommended reactivating and updating the partial claim program, which allows borrowers to receive payment relief and/or assistance in resolving missed payments while keeping their original mortgage rates (which are much lower than currently available rates); reconfiguring and expanding the statutorily authorized refund program, which enables the VA to purchase delinquent loans from servicers and change the terms of the original loans to reduce veterans’ monthly payments; extending mortgage repayment out to a full 40-year term if needed to reduce a veteran’s monthly mortgage payment to an affordable level; and expanding the use of limited documentation applications, which lowers the administrative burden for veterans to qualify for loss mitigation options. 

Lead Organization

National Consumer Law Center

More Information

Click here to read the letter.

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