1000s of veterans face foreclosure and it's not their fault. The VA could help | Hacker News Reader

1000s of veterans face foreclosure and it's not their fault. The VA could help

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37 pointsrntn7 comments

I'm trying to figure out what this article is saying, how people could be losing their homes but it not being "their fault". The best I can understand is that these people had their loan payments deferred for COVID, and now their payments are resuming, but interest rates have risen in the meantime, and so now when their payments are resuming they have to pay more because of higher interest rates, and they can't afford to pay it. So ... they took out a loan with a variable interest rate, they can't pay the loan now that interest rates have changed, and so it's "not their fault" because these programs refused to keep allowing them to defer payments?

They were allowed to defer payments, placing those at the end of the “queue” of payments. Then the program was cancelled before the extended terms of the loans.

> In October 2022, the Department of Veterans Affairs ended the so-called Partial Claim Payment program, or PCP, that enabled homeowners to do that. This happened even though the mortgage industry, housing advocates and veterans groups all warned the VA not to end the program, saying thousands of homeowners needed to catch up on missed payments. Interest rates had risen so much that many couldn't afford to refinance or get back on track any other way.

stupid question: can they backpedal end of the program and fix this? We need to keep as many people “housed” as possible. can we use our defense budget for it? Sounds like America is safer if vets have homes, or else why the hell would anyone join the military.

it doesn't sound like they had an ARM though. it sounds like the VA program ending means the borrowers owe the payments they missed during covid as a lump sum

No, they have fixed rate loans, but were unable to make some payments. You can usually arrange in a time of need to defer payments by arranging the current payments to the end of the loan term for some finite number of payments. These people did that.

However the authority of the VA to offer that was a short term emergency authority. While many loan originators offer this as standard practice the VA only offered it during COVID.

When the authority ran out, everyone with deferred payments were suddenly required to pay them IMMEDIATELY in full or lose their home.

An option would be to refinance it reterm the home, but that requires resetting the interest rates to what is now more than double what they originally financed their loans for.

According to the article people were assured by their servicers that this scenario would not happen. It seems inexplicable the VA offered such a program that had a sudden termination date in the near future would would totally invalidate the structure of the program from deferment to immediate lump sum payment.

As such, it really isn’t the fault of the borrower, or even the servicers. They read the fine print and signed up knowingly. It’s the fault of the VA for offering something that they couldn’t offer.

My spouse receives union publication and she showed me a similar story that had me scratching my head. The story was about a union member who was losing his home through foreclosure and he and his wife had nowhere to go. Reading a bit further revealed that the union worker had stopped paying his mortgage because of a misunderstanding about supplemental insurance that he thought covered his mortgage. He ignored the many notices of foreclosure, ignored the court summons, and yet was surprised when he and his wife were evicted. The quotes from the homeowner revealed a tenuous grasp of reality. I felt really bad for the guy but he clearly made a series of very bad decisions. The article headline suggested he was a victim of greedy banks, yet the reporting was clearly pointing to a deeper problem.

The writer appeared to be taking for granted the idea that housing is a right not a privilege. It was a weird take.

The VA is such a piece of work. One of the largest sinkholes of taxpayer dollars and they consistently break down with such unforced errors.

I hope we all remember that the VA is concurrently in the middle of a forced pause in the rollout of their new electronic health record because they let Oracle do literally nothing for years and then when they said "Oracle you're out of time." Oracle said "yeah flip it on, we'll see what happens."

Once the clinics stopped working the head of the VA goes to Congress and says "We're holding Oracle responsible, by making them fix it." So now, congrats you're paying Oracle twice for the same software.

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