CHARLOTTE — Many veterans were just trying to save their homes when they signed up for mortgage forbearance during the pandemic.
They could pause their payments and make them up later without penalty. When they had to start paying again, they planned to pay their normal monthly payments.
“Really, what they were looking for was a little bit of help,” realtor Jenny Dunning told Action 9′s Jason Stoogenke.
But now, the veterans are learning lenders can ask them for all the money they missed, right now in one lump sum. “So forbearance is up. Your money is due. Let’s say it’s $20,000. ‘I don’t have $20,000,’” Dunning said.
So, veterans are defaulting and facing foreclosure.
According to multiple published reports, 34,000 veterans are behind on payments and 6,000 are already in the foreclosure process.
One option is to refinance, but interest rates have gone up so much that many veterans can’t afford it.
Another option is to sell and move, but that’s not just daunting, in many cases they’d have to downsize because of the interest rates.
“For a lot of people, this is a tragic time. And they won’t be just affected right now. They’re going to be affected for years to come,” Dunning said.
Even worse, all of this can hurt your credit score, making it harder to get loans in the future, and not just home loans, but car loans too.
Some U.S. Senators are so concerned they sent the head of the Department of Veterans Affairs this letter, urging the agency to find a solution and fast.
According to national news articles, the VA is working on a solution, but it could take months, which is too late for many. Stoogenke reached out to the agency but did not hear back in time for this report.
Just to be clear, we’re talking about veterans and VA-backed loans. Federal lawmakers and consumer advocates say homeowners who went into forbearance with other federally backed loans such as Fannie Mae, Freddie Mac, and FHAs can shift the payments they skipped to the end of the loan and avoid foreclosure.
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