Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit expressed unease over the Department of Veterans Affairs’ (VA) request that servicers pause foreclosure proceedings of VA-guaranteed loans.
Earlier this month, the VA asked mortgage servicers for a foreclosure pause through May 31, 2024. The VA said that it would “work with servicers on workable home retention solutions for veterans” during that period. The department also said it was extending the Covid-19 Refund Modification program through May 31, 2024, in order to “allow veterans to obtain a zero-interest, deferred-payment loan from VA to cover missed payments and modify their existing VA-guaranteed loan to achieve affordable monthly payments for the duration of this extension.”
In a statement, Broeksmit said the MBA shared “the VA’s commitment to helping distressed veteran borrowers stay in their homes through a more affordable and sustainable mortgage payment. We also believe that restoring the VA’s standalone partial claim program – which worked successfully for Veterans and servicers until it was sunset in October 2022 – needs to be part of the VA’s long-term plans to assist borrowers facing hardships.”
“In the meantime,” he added, “we have significant concerns on the implementation of the voluntary foreclosure moratorium. Servicers provided relief to struggling borrowers during the pandemic by advancing the payments owed on their mortgages and are willing to do so again. However, the VA needs to provide a detailed plan on how servicers will be reimbursed for advancing payments on behalf of borrowers.”