09 May VA Home Loan Foreclosure & How To Get Help
Losing your home to a foreclosure can be a traumatic experience. And, for military members and Veterans who have already sacrificed a lot for their nation, going through a foreclosure can be quite challenging.
However, if you have an ongoing VA loan and cannot make timely payments, foreclosure is not the only option. The US Department of Veterans Affairs (VA) offers several tools to help you avoid foreclosure.
This article will cover everything you need to know about avoiding the VA foreclosure and what to do when it’s inevitable.
What Should I Do If I Can’t Pay The Mortgage?
If you are having difficulty paying off the mortgage, it is best to contact your loan provider immediately. While you might be hesitant to inform them about your inability to repay the loan, they’ll help you sort the problem out. The VA has incorporated several tools to help service members on the verge of going through a foreclosure. Therefore, it is best to contact them first.
You can also get friendly advice by contacting a VA loan technician on 877-827-3702. If this doesn’t feel right, simply mail your problem to LGYLANational.VBACO@va.gov. However, make sure you include the address and name of the loan.
Amidst all this, you might receive multiple offers to help you make the back payments. However, it’s best to stay clear of these false offers. In case you receive such an offer, call your regional VA office to ensure that the offer is valid.
How Can I Avoid Foreclosure On My Home?
There are several ways through which you can avoid foreclosure. However, the process starts with financial counseling and getting in touch with a VA loan technician. Therefore, it is wise to inform the VA before going to anyone else.
If you are a Veteran or a surviving spouse of a veteran, you can contact the VA anytime to help you through the financial crisis. Their VA loan technician will provide you with financial counseling even if you have an ongoing non-VA loan. Moreover, if it’s been past 61 days since you made a payment on an ongoing VA home loan, the department will automatically assign you a technician who’ll work with you on the case.
Moving forth, there are about six ways through which the department can help you avoid foreclosure.
- The VA will come up with a new repayment plan, OR
- You’ll be provided extra time to repay the missed installment, OR
- The technician will come with a new mortgage payment schedule to help you start fresh, OR
- You’ll be provided extra time to sell the house, OR
- If your home is worth less than what you actually owe to the department, the VA will accept the total proceedings of your house and close the loan. However, this might stop you from getting another VA loan, OR
- You can sign the deed of your home to the provider to avoid a foreclosure.
Here’s a brief on all the above-stated options.
What Is A Repayment Plan?
This option is one of the most common options provided by your loan technician. If you are unable to make timely payments, your loan technician might recommend a new repayment plan. Under this, your due balance will be added to your monthly balance for some months.
What Is Special Forbearance?
Under special forbearance, you’ll be given extra time to make the pending monthly installments before the foreclosure occurs.
VA Mortgage Assistance
While there are several ways you can avoid a foreclosure, the VA will offer you mortgage assistance in the form of financial counseling. You can even receive counseling if you have a non-VA loan.
What is VA Loan Modification?
Looking to start fresh? This could be your option. Under VA loan modification, your loan technician will revise your interest rates and loan term and include all the missed payments into your loan balance. In short, your loan will start afresh.
What is a Short Sale?
If you want to let go of the house and consolidate your debt, you can ask the technician to conduct a short sale. This will be applicable if the money you received from selling the home is less than the actual amount you owe to the department. The department will accept the total proceedings and close your loan.
However, this option might stop you from using your VA home loan benefits again.
What is a deed in lieu of foreclosure?
Under this option, you’ll be required to transfer the deed of the house to the loan technician. The house will no longer belong to you. The VA will then sell your home and recover the money. This could be beneficial for two reasons- first, it will not impact your credit score much; second, unlike a foreclosure, it won’t be a public process, and your sanity won’t be at stake.
Who can I call for VA Home Loan Assistance?
It’s wise to inform the department right away if you’re having difficulty paying back the loan. You can call at 877-827-3702 or email at LGYLANational.VBACO@va.gov to get in touch with a loan technician.