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Thousands of veterans deal with foreclosure and it's not their fault. The VA could assist
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By Chris Arnold, Robert Benincasa
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Updated Thursday, November 16, 2023 • 9:53 AM EST
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Heard on Morning Edition
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Becky Queen keeps in mind opening the letter with the foreclosure notification.
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"My heart dropped," she said, "and my hands were shaking."
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Queen resides on a small farm in rural Oklahoma with her partner, Ray, and their two young kids. Ray is a U.S. Army veteran who was injured in Iraq. Since the 1940s, the federal government has helped veterans like him buy homes through its VA loan program, run by the Department of Veterans Affairs.
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Now the VA has put this household on the edge of losing their house.
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"I didn't do anything incorrect," states Ray Queen. "The only thing I did was trust a business that I'm supposed to rely on with my mortgage."
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Like millions of other Americans, the Queens took benefit of what's called a COVID mortgage forbearance, which enabled property owners to avoid mortgage payments. It was set up by Congress after the pandemic hit for people who lost income.
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But an NPR investigation has actually found that thousands of veterans who took a forbearance are now at risk of losing their homes through no fault of their own. And while the VA is working on a way to fix the issue, for lots of it could be too late.
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After NPR initially published this story, a group of four U.S. Senators sent out a letter to the VA asking it to instantly stop foreclosing on the homes of veterans and [servicemembers](https://biigbullproperties.com). It's unclear if the VA will do that.
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For the Queens, this all started in September of 2021, when [Becky's mother](https://samuivillanow.com) died of COVID-19. She needed to take a [prolonged leave](https://www.stayinggreenrealty.com) from work and lost her task.
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So last year, with their cost savings diminishing, the couple states they called the business that handles their mortgage, Mr. Cooper, and were told they could avoid six months of payments. And as soon as they [returned](https://dev.hausmakit.com) on their feet and might begin paying again, the couple states they were informed, they would not owe the missed payments in a huge lump amount.
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"I really specifically asked 'how does this work?'" says Becky Queen. "They stated we're taking all of your payments, we're bundling them, and we're putting them at the end."
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That is, the missed payments would be transferred to the back end of their loan term so they might just begin making their normal mortgage payment again.
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But that's not how it worked out.
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In October 2022, the Department of Veterans Affairs ended the so-called Partial Claim Payment program, or PCP, that allowed house owners to do that. This occurred although the mortgage market, housing advocates and groups all warned the VA not to end the program, saying thousands of homeowners required to capture up on missed out on payments. Rates of interest had actually increased a lot that lots of couldn't afford to re-finance or get back on track any other way.
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Ray Queen says nobody informed him about any of this.
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"How does that occur?" Queen asked. "This is expected to be a program that you all have to help individuals in times of crisis, so you don't take their home from them."
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The Queens say they tried to come off their forbearance in February of this year and resume paying their mortgage. They were both working once again. But they encountered hold-ups with the mortgage business.
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Then, in September, the couple says they were told they needed to come up with more than $22,000, which they do not have, or either offer their house or get foreclosed on.
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Their mortgage servicing business, Mr. Cooper, stated in a statement it "checked out every possible avenue to resolve a service for this client." But it stated the VA needs better loss-mitigation choices and referred NPR to a letter from advocates, [industry](https://www.surpropiedades.cl) and veteran groups advising the VA to restart the PCP program.
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The VA "has truly let individuals down"
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"The Department of Veterans Affairs has actually let people down," says Kristi Kelly, a consumer lawyer in Virginia who states she is hearing from a great deal of other veterans in the same situation as Ray and [Becky Queen](https://saleproperty.net).
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"The homeowners got in into COVID forbearances, they were made sure promises, and there were particular representations that were made," says Kelly. "And the VA essentially pulled the rug out from under everybody."
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For some house owners, ending the program might not indicate foreclosure, however it still indicates a [financial challenge](https://jrfrealty.com).
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"Much of these people have 2 or 3% interest rate loans," Kelly states. With the [PCP program](https://kotahostels.co.in) they could keep that rates of interest. And now, she states, the only method they'll be able to save their home is to enter into a loan modification where the interest rate will be around today's market rate of 7.5%.
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"For a lot of people, their payments will increase by $600 or $700 a month, because the VA has actually chosen to end the partial claim program."
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Many homeowners can't pay for such a big boost in their regular monthly payment.
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According to the information firm ICE Mortgage Technology, 6,000 house owners with VA loans who had actually COVID forbearances are currently in the foreclosure process. And 34,000 more are overdue.
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Kelly says most other [property owners](https://pjstaging.pacittijones.com) in America - people with FHA loans, for instance, or loans backed by Fannie Mae and Freddie Mac - still have ways to prevent foreclosure by moving missed out on payments to the back of the loan term.
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But property owners with VA loans don't, since the VA ended that program. So veterans are being treated even worse than many other house owners, Kelly said.
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"Service members are in a position where they're going to lose their home," she states. "And for many individuals, that's everything they work for - and all their wealth remains in their homes."
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VA has a plan to help, but it could be too late
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The Department of Veterans Affairs says it had no option however to end the program.
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"We had a short-term authority for that particular program during COVID," states John Bell, executive director of the Veterans Benefits Administration's Loan Guaranty Service. "It wasn't part of our regular authority."
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Some in the industry think the VA did, in truth, have the authority to extend the program. But in any case, it ended it.
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Now, however, the VA is taking the scenario seriously.
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NPR has learned that the VA is working on a brand-new program to replace the old one. It will operate in a different method however to similar impact, to save people from foreclosure. Bell states it's going to take 4 to 5 months to get it up and running.
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That's too wish for much of those 6,000 VA homeowners already in the foreclosure process. Not to discuss the lots of more who are overdue.
[consumersearch.com](https://www.consumersearch.com/health-beauty/affordable-vs-premium-best-hair-straightener?ad=dirN&qo=paaIndex&o=740007&origq=estateagents) +
Already, information reveals that more VA property owners have been heading into foreclosure considering that the VA ended its PCP program. The very same is not true for FHA loans or loans backed by Fannie Mae or Freddie Mac.
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Will the firetruck get here far too late?
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With so numerous property owners at threat, there's growing pressure on the VA to stop foreclosing on veterans till it gets its fix up and running.
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"There should be a time out on foreclosures," says Steve Sharpe, a senior attorney at the National [Consumer Law](https://laculracilor.ro) Center. "Veterans must actually have the ability to have an ability to access this program when it comes online because it's been so long considering that they've had something that will really work.
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Sharpe says the VA could likewise restart the PCP program that it shut down. "They have the authority to do both," he says.
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Pausing foreclosures seems like an excellent concept to veteran Ray Queen in Oklahoma.
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"Let us keep paying towards our routine mortgage in between now and then," he says. "Then once the VA has actually that fixed we can come back and deal with the [scenario](https://kotahostels.co.in). That seems like the adult, mature thing to do, not put a household through hell."
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NPR repeated Ray Queen's plea to John Bell at the VA directly. Bell said the VA is "exploring all alternatives at this moment in time."
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"We owe it to our [veterans](https://goldenestate.am) to make certain that we're providing every chance to be able to remain in the home," Bell stated.
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Wednesday, a group of U.S. Senators sent out a letter to the VA urging them to put a hold on any more foreclosures.
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"Without this pause, thousands of [veterans](https://syrianproperties.org) and servicemembers might needlessly lose their homes," Sens. Sherrod Brown, Jon Tester, Jack Reed, and Tim Kaine, all Democrats, composed in a letter to VA Secretary Denis McDonough. "This was never ever the intent of Congress."
[faqtoids.com](https://www.faqtoids.com/knowledge/comparing-traditional-vs-online-management-classes-right?ad=dirN&qo=paaIndex&o=740006&origq=estateagents) +
Tester, of Montana, chairs the Veterans' Affairs Committee, and Brown, of Ohio, chairs the Banking Committee. They asked the VA "to implement an instant pause on all VA loan foreclosures where debtors are most likely to be eligible for VA's new ... program until it is readily available and [debtors](https://albaniaproperty.al) can be evaluated to see if they certify."
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Ray and Becky Queen are hoping the VA does let individuals keep their homes till the new program can use them a method to get current on their mortgages. Because if the firetruck reveals up after your home has burned down, it's not going to do much helpful for the countless veterans and service members who need help now.
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Transcript
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LEILA FADEL, HOST: An NPR investigation has actually found that thousands of U.S. military service members and veterans could lose their homes through no fault of their own. As NPR's Chris Arnold reports, the Department of Veterans Affairs is dealing with a repair. But it might be too late.CHRIS ARNOLD, BYLINE: Ray and Becky Queen are revealing us around their farm in Bartlesville, Okla.BECKY QUEEN: This is Cagney and Lacey, our ducks.ARNOLD: The couple lives here with their two young kids. Ray served in Iraq in the Army. Inside their home, he says that he was injured by an improvised explosive gadget, or IED.RAY QUEEN: And so you know, I have mental retardation from my time in Iraq. So there's a lot of various things that do not work the method they're expected to anymore. And my memory is not great.ARNOLD: For years, the federal government's assisted veterans like Queen to buy homes through its VA loan program. But now the VA has put this family on the brink of losing their house.B QUEEN: This is the letter that my husband and I got the other day mentioning that they're beginning foreclosure proceedings.ARNOLD: What's occurring is that like millions of other Americans, the Queens made the most of what's called a COVID mortgage forbearance. It was established by Congress after the pandemic hit for individuals who lost earnings. When Becky's mother died of COVID, she needed to take a prolonged leave from work and lost her job. In 2015, the couple states their mortgage company told them that they could skip six months of payments while they got back on their feet and then simply start paying their mortgage again.B QUEEN: I really specifically asked, how does this work? And they said, we're taking all of your payments. We're bundling them, and we're putting them at the end.ARNOLD: That is, the missed out on payments would relocate to the back end of their loan term so they could resume their typical mortgage payment. But that is not how it worked out, because a year ago in October, the Department of Veterans Affairs ended the program that made it possible for house owners to do that, even though housing supporters and the mortgage market and veterans groups all warned them not to end the program because thousands of property owners needed to capture up on missed payments. Rate of interest, too, had increased a lot that many could not pay for to refinance or return on track any other method. Ray Queen states no one told him about any of this.R QUEEN: How does that happen? This is expected to be a program that y' all have to help individuals in times of crisis so you do not take their home from them.ARNOLD: The couple states in September, they were told that they required to come up with a huge payment - upwards of $22,000, which they do not have - or offer their home or get foreclosed on.B QUEEN: My heart dropped, and, like, my hands were shaking.KRISTI KELLY: The Department of Veterans Affairs has truly let individuals down.ARNOLD: Kristi Kelly is a consumer lawyer in Virginia who's hearing from a great deal of veterans who remain in the exact same boat.KELLY: The house owners entered into COVID forbearances. They were ensured promises, and the VA basically pulled the carpet out from under everybody.ARNOLD: Kelly states for a lot of other homeowners in America, there are still methods to move your missed payments to the back of the loan term so you can prevent getting foreclosed on, however not if you have a VA loan. So she states veterans are being dealt with even worse than many other homeowners.KELLY: Service members are going to lose their home, and for many people, that's whatever they work for and all their wealth, are in their homes.ARNOLD: For its part, the Department of Veterans Affairs states it had no option but to end the program. John Bell heads up the VA's home financing division.JOHN BELL: We had a short-term authority for that particular program during COVID.ARNOLD: Some in the market believe the VA did in fact have the authority to extend the program. Now, though, NPR has learned that the VA is working on a new program to change the old one, however that's still 4 or 5 months away - too wish for a lot of the 6,000 house owners with VA loans who are in the foreclosure procedure. Not to discuss there's 34,000 more who were overdue. Today there's pressure on the VA to put a pause on foreclosures while it gets that program running. John Bell states the VA is, quote, "thinking about all alternatives."BELL: We owe it to our veterans to make certain that we're providing every opportunity to be able to remain in the home.ARNOLD: Ray and Becky Queen are hoping that the VA does put a time out on foreclosures, since if the fire engine appears after your house burns down, it's not going to do much helpful for the thousands of veterans who need aid now.Chris Arnold, NPR News.
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