On July 30, President Donald Trump signed into law a new act that could save many struggling veterans from foreclosure. Right now, of 3.7 million VA borrowers, around 70,000 are at least 90 days late on their mortgage payments, according to the House Committee on Veterans’ Affairs.
In a news release, the committee identifies two main provisions of the new act, H.R.1815 - VA Home Loan Program Reform Act:
- It provides these financially distressed veterans with needed relief and a second chance to keep their homes.
- It includes proper funding levels for the VA Grant and Per Diem program, as part of the VA’s homelessness prevention programs. Funds will go to community agencies providing services to veterans experiencing homelessness.
How the New Law Could Help Distressed VA Loan Holders
NMP suggests the new law could enable VA to turn missed payments into second mortgages, thus "enabling borrowers to become current on their mortgage without refinancing or altering their original loan terms. The structure closely mirrors existing programs administered by the FHA and USDA."
Other Provisions
Additionally, it scraps rules that limited certain closing costs that VA borrowers could pay. While these rules protected veterans from excessive fees, they also made them less competitive as buyers in the wider housing market.
"Rep. Van Orden’s VA Home Loan Program Reform Act will modernize the VA Home Loan to meet veterans’ needs and reduce the risk of veteran homelessness," said House Committee on Veterans’ Affairs Chairman Mike Bost (R-Ill.) in a statement. "I’m proud that we fought hard to get this good bill to President Trump’s desk to keep our promise to those who have served."
How Can VA Loan Holders Get Help?
Those who are struggling with house payments and have a VA loan should contact their mortgage servicer. This is the company they make payments to.
The loan servicer can discuss options and how this new law opens up possibilities for financially-distressed veterans.
