Tornado Relief Sought for VA Mortgage Loan Borrowers

The VA is asking mortgage lenders and servicers to provide relief to military borrowers in areas affected by April’s devastating tornadoes.

In a circular released earlier this month, the agency encourages servicers to waive late charges and halt credit reporting for veterans whose homes, families or livelihoods were impacted by the storms, which tore through parts of the South.

The VA will not penalize mortgage servicers for late default reporting.

The agency has also suggested that financial institutions wait at least 90 days before initiating any new foreclosure claims against veterans in affected areas.

There’s also a special consideration for National Guard members who are activated in the wake of the disaster. Extended periods of activation, especially when it comes to disaster relief, can levy a significant financial toll on Guard members.

The VA issued a similar request to mortgage companies after last year’s BP oil spill, which affected thousands of veterans and their families in Louisiana, Alabama and elsewhere along the Gulf Coast.

The agency pushes its approved lenders to work closely with borrowers to avoid financial calamity. In fact, the VA actually incentivizes lenders to avoid foreclosure. The VA also has teams dedicated to helping veterans stay in their homes.

The agency’s policies and proactive approach helped nearly three quarters of the VA borrowers who defaulted in FY 2009 avoid foreclosure.

For borrowers, the first step is contacting their mortgage servicer. But they can also reach out to their nearest VA Regional Loan Center for help. To find the closest loan center, call 1-877-827-3702.

About the author: Chris Birk writes about real estate and the mortgage industry for a host of sites and publications, from Lenderama and Bigger Pockets to the Huffington Post and Motley Fool. A former newspaper and magazine writer, he is also content director for a leading VA lender. Follow him on Google+.

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Posted in: Mortgages, News

1 Comment on "Tornado Relief Sought for VA Mortgage Loan Borrowers"

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  1. What makes these tragedies even more tragic is when people can’t get help they so desperately need.

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