If you are having trouble making mortgage payments on your VA loan because of the pandemic, you have special help available to you as a veteran.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides a mortgage payment forbearance option for all borrowers who are suffering financial hardship due to the COVID-19 national emergency.
Forbearance is just a fancy word for an agreement between you and your lender that modifies your existing payment schedule, either by suspending or reducing payments for a certain length of time.
Forbearance lets you deal with short-term financial problems by delaying or lowering your monthly mortgage payments until you get back on your feet and bring your mortgage payments up to date.
Since a VA loan is backed by the federal government, the company that issued the loan MUST grant you forbearance if you request it. No proof of your financial hardship is required, other than your statement. Federal Housing Administration, U.S. Department of Agriculture and all other federally backed loans are also covered under this rule.
If you are having trouble making your mortgage payments, you should immediately contact your lender and explain your situation to it to try to work out a payment plan that suits you both.
As with anything involving money, make sure you get everything in writing. For instance, if you call your mortgage company and it agrees to a six-month suspension of payments with no penalty, make sure you get an email or a letter from it stating this fact. Otherwise, you may be on the hook for late payments or, even worse, have your mortgage go into foreclosure.
Under the CARES Act, you are allowed to request an initial forbearance of monthly mortgage payments for up to 180 days, and may request up to an additional 180 days after the first period expires. The lender must approve the forbearance for the amount and time that you request.
Remember, forbearance doesn't get you out of paying your mortgage -- it just delays it. So you really shouldn't request a longer forbearance than is necessary.
Also, the CARES Act doesn't change your credit record. If you were delinquent on your mortgage before you request forbearance, you will remain delinquent until you get your payments current.
The Department of Veterans Affairs is expecting a large number of veterans to become delinquent on their mortgage payments and has recently updated its computer systems to handle up to 5,000 foreclosures a day.
Avoiding foreclosure should always be your goal. To that end, the VA has plenty of help available. This assistance is available to all veterans and their surviving spouses, even if they don't have a VA-backed loan. The VA provides financial counseling and will even serve as a liaison between you and your mortgage company to work out a fair deal.
The VA can also help you avoid financial scams, some of which may offer to make mortgage payments for you, but could end up costing you more in the long run or even trick you into signing away your house.
If you have questions about the credibility of such offers, or are having issues making your payments and don't want to contact your lender, the VA wants you to call it for help as soon as possible.
You should contact the VA at 877-827-3702 for more information.
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