VA loan delinquency assistance for veterans can help save a home in danger of being foreclosed upon. Missing a mortgage payment is a serious problem, but it’s also one that can be fixed long before a home winds up in the foreclosure process.
You do not have to deal with financial difficulties alone; help is available from both the lender and the Department of Veterans Affairs for those with VA mortgage loans to protect the home and save it from being foreclosed upon.
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VA Home Loan Mortgage Payment Requirements
A VA mortgage loan is like any other major line of credit; even though it is a military benefit, the payments must still be made on time. In cases where there may be a late or missed payment, it’s crucial that the borrower contact the lender as quickly as possible to make arrangements to avoid going into loan default.
You also have the option of discussing your needs with a VA loan technician for the most current advice and options. We’ll cover more about talking with a VA technician later in the article.
Veterans Who Need Financial Counseling To Avoid Foreclosure
Did you know the Department of Veterans Affairs pledges help for veterans and surviving spouses of veterans? You may be eligible for financial counseling and this may be offered to you even if your mortgage is not a VA home loan.
Furthermore, the VA official site reminds those who have a VA Direct Loan or a VA-guaranteed mortgage that borrowers may contact the VA anytime, “to request that we assign a VA Loan Technician to your loan.”
These VA technicians may be able to provide financial counseling and help borrowers work with their lenders to avoid foreclosure (see the phone number listed below).
Regardless of whether a borrower chooses to initiate such help on their own, the VA official site advises those with VA mortgages that after the loan becomes 61 days past due, a VA loan technician will be automatically assigned to your mortgage loan. Regardless, do not assume the VA will automatically try to reach out to you-it’s best to initiate the conversation yourself.
What Happens When You Miss A Payment?
No two lenders handle things exactly the same way, but we can look at the information offered by the Department of Housing and Urban Development on the subject of foreclosure avoidance to learn what happens in general once a borrower starts missing home loan payments.
36 Days Past Due
A participating VA lender may report a missed mortgage payment to the major credit reporting agencies as early as 36 days late.
Your credit may take a hit during this time, but a single missed payment is not as uncommon as you might think. Your loan officer may be able to work with you quickly to balance the books, so to speak, on your home loan. Do not hesitate to reach out to your lender at this time-you have the most flexible options open to you at this stage.
45 Days Past Due
This is a more serious late or missed payment situation and your options may start to be reduced at this stage. Your loan officer is required to make “live contact” with you at this point and you will start receiving contact from the lender about loss mitigation options. DO NOT DELAY making arrangements with the VA lender here-any later and you risk having fewer choices to save your home.
121 Days Past Due
Your lender has the option to refer the case to a foreclosure attorney at this point; do not let any more time go by without contacting the lender to make arrangements-your home is in serious jeopardy at this point and you will need to take decisive action to prevent foreclosure even if that means calling the lender to explain your situation and ask for advice because you don’t know what to do.
The lender will know what to do and how to help you. You will need what some in the home loan industry refer to as an “active loss mitigation package” to move forward from here, and you can only get that with the help of your lender.
Yes, you can call the Department of Veterans Affairs at this stage for advice and help, too…but make sure your lender is included in these arrangements even if that is simply to inform the financial institution that you are working on the problem with the VA. Always include the lender.
The Options You Have After Missing One Mortgage Payment Or More
There are several options depending on how severe late or missed payments are. In many cases you may be able to work out an arrangement with the lender to make up missed payments and get back on track with your mortgage.
This usually results in a repayment plan, sometimes it may involve a refinance loan that includes the missed mortgage payments, or other arrangements may be made.
One agreement is known as “special forbearance” and it essentially gives the borrower more time to make up the payments. In other cases, a loan modification may be required-this is not necessarily a full-blown refinance loan but it does add the missed payments back into your loan amount to help you get back on schedule with the payments.
The earlier you act once you fall behind, the more available these options above are to you. The longer you wait, the smaller your chances get to have the loan modified, get loan forbearance, etc.
Those who wait too long have much more limited options open to them including these as described on the VA official site:
Arranging A Private Sale: Some borrowers choose to sell the home instead of trying to catch up on missed payments. Making this arrangement requires the participation of the lender so you can delay the foreclosure proceedings in order to sell.
Arranging A Short Sale: Do you owe more on the property than it’s actually worth? Your loan officer may agree to a procedure known as a short sale.
In these situations, the lender agrees to “accept the total proceeds from the home sale” according to HUD 4000.1 even in cases where the sale results in getting less than the full amount owed on the mortgage loan. In these cases, the loan is considered paid in full.
Deed In Lieu Of Foreclosure: This requires the homeowner to sign the deed to the home over to the lender who takes ownership of the property at transaction time.
Talk To A VA Loan Technician For Help With Your VA Mortgage Or VA Direct Loan
The Department of Veterans Affairs offers help for borrowers to decide which of the above options including loan modification or forbearance all the way down to deed-in-lieu of foreclosure might be most appropriate.
You can discuss your situation with a VA Loan Technician at 1-877-827-3702.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News
