Vets Have Options When Facing Foreclosure
The government wants to keep those who served from losing their homes.
VA loans already have the lowest foreclosure rate of any loan product going, according to the Department of Veterans Affairs. The agency has an array of avenues for veterans and active duty military to consider when facing the prospect of losing their home.
VA guidelines pave a path to helping those who served stay in their homes.
As is the case with a potential default on any other loan, the first thing to do is to call your lender and attempt to negotiate alternative payment terms or other options that will help you stay ahead of your payments. The VA has a large number of loan counseling experts who are there to keep VA borrowers in their homes.
There are a variety of helpful programs that may assist you during tight financial times and a VA loan counselor can help you establish which ones are right for your situation. Options include:
- Loan forbearance: borrowers can make up their missed payments on a payment schedule. This option basically reduces or delays your payments for a short period with the understanding that you will bring the account to a current status at the end of that period.
- Loan modification: future payments are amended and a new payment plan is established, with the overdue balance of the loan being factored into the new schedule.Repayment regimen: extra funds are added to future payments in addition to your usual payment amount to avoid foreclosure proceedings.
- Repayment regimens can be helpful if you’ve had a temporary financial setback and are on the way to recovery.
- Additional time to sell the property in question without worry of foreclosure.
It’s important for borrowers to remember that foreclosure is a lose-lose proposition. Not only does foreclosure hurt the borrower’s credit future but it also hurts lenders, who typically lose money during the foreclosure transaction.
If you fear that your VA loan is in danger of foreclosure, call the VA’s recently established hotline at 877-827-3702. You’ll be able to speak with a representative (in one of eight regional VA loan service centers) who will be able to give you more information on the steps you can take to protect your home and the options that you have to safeguard your financial future.