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Veterans face foreclosure after VA ends a COVID forbearance program An NPR
investigation finds that many people with VA loans who got a COVID forbearance
are at risk of losing their homes. The VA has a fix, but it could be too late
unless it halts foreclosures.


INVESTIGATIONS


THOUSANDS OF VETERANS FACE FORECLOSURE AND IT'S NOT THEIR FAULT. THE VA COULD
HELP

Updated November 16, 20239:53 AM ET Originally published November 11, 20235:00
AM ET
Heard on Morning Edition

By 

Chris Arnold

, 

Robert Benincasa

THOUSANDS OF VETERANS FACE FORECLOSURE AND IT'S NOT THEIR FAULT. THE VA COULD
HELP

Listen· 4:274-Minute ListenPlaylist
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Enlarge this image

Army veteran Ray Queen stands with his wife, Rebecca Queen, outside their home
in Bartlesville, Okla. An NPR investigation has found that thousands of U.S.
military service members and veterans, including the Queen family, are at risk
of losing their homes through no fault of their own. Michael Noble Jr. for NPR
hide caption

toggle caption
Michael Noble Jr. for NPR


Army veteran Ray Queen stands with his wife, Rebecca Queen, outside their home
in Bartlesville, Okla. An NPR investigation has found that thousands of U.S.
military service members and veterans, including the Queen family, are at risk
of losing their homes through no fault of their own.

Michael Noble Jr. for NPR

Becky Queen remembers opening the letter with the foreclosure notice.

"My heart dropped," she said, "and my hands were shaking."


INVESTIGATIONS


VA HALTS FORECLOSURES FOR THOUSANDS OF VETERANS ABOUT TO NEEDLESSLY LOSE THEIR
HOMES

Queen lives on a small farm in rural Oklahoma with her husband, Ray, and their
two young kids. Ray is a U.S. Army veteran who was wounded in Iraq. Since the
1940s, the federal government has helped veterans like him buy homes through its
VA loan program, run by the Department of Veterans Affairs.

But now the VA has put this family on the brink of losing their house.

"I didn't do anything wrong," says Ray Queen. "The only thing I did was trust a
company that I'm supposed to trust with my mortgage."




ECONOMY


ARE YOU A HOMEOWNER WHO HAS RUN INTO PROBLEMS ON A COVID MORTGAGE FORBEARANCE?

Like millions of other Americans, the Queens took advantage of what's called a
COVID mortgage forbearance, which allowed homeowners to skip mortgage payments.
It was set up by Congress after the pandemic hit for people who lost income.

Enlarge this image

The Queens' two young children jump on a trampoline in the front yard of their
home. Michael Noble Jr. for NPR hide caption

toggle caption
Michael Noble Jr. for NPR


The Queens' two young children jump on a trampoline in the front yard of their
home.

Michael Noble Jr. for NPR

But an NPR investigation has found that thousands of veterans who took a
forbearance are now at risk of losing their homes through no fault of their own.
And while the VA is working on a way to fix the problem, for many it could be
too late.

After NPR initially published this story, a group of four U.S. Senators sent a
letter to the VA asking it to immediately stop foreclosing on the homes of
veterans and servicemembers. It's unclear if the VA will do that.

For the Queens, this all started in September of 2021, when Becky's mother died
of COVID-19. She had to take an extended leave from work and lost her job.


INVESTIGATIONS


VETERANS FEAR THE VA'S NEW FORECLOSURE RESCUE PLAN WON'T HELP THEM

So last year, with their savings dwindling, the couple says they called the
company that manages their mortgage, Mr. Cooper, and were told they could skip
six months of payments. And once they got back on their feet and could start
paying again, the couple says they were told, they wouldn't owe the missed
payments in a big lump sum.

"I very specifically asked 'how does this work?'" says Becky Queen. "They said
we're taking all of your payments, we're bundling them, and we're putting them
at the end."



That is, the missed payments would be moved to the back end of their loan term
so they could just start making their normal mortgage payment again.

But that's not how it worked out.

Enlarge this image

Becky Queen greets one of her horses outside her home. Michael Noble Jr. for NPR
hide caption

toggle caption
Michael Noble Jr. for NPR


Becky Queen greets one of her horses outside her home.

Michael Noble Jr. for NPR

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.

Ray Queen says nobody told him about any of this.

"How does that happen?" Queen asked. "This is supposed to be a program that you
all have to help people in times of crisis, so you don't take their house from
them."

The Queens say they tried to come off their forbearance in February of this year
and resume paying their mortgage. They were both working again. But they ran
into delays with the mortgage company.

Then, in September, the couple says they were told they needed to come up with
more than $22,000, which they don't have, or either sell their house or get
foreclosed on.

Their mortgage servicing company, Mr. Cooper, said in a statement it "explored
every possible avenue to work through a solution for this customer." But it said
the VA needs better loss-mitigation options and referred NPR to a letter from
advocates, industry and veteran groups urging the VA to restart the PCP program.


THE VA "HAS REALLY LET PEOPLE DOWN"

"The Department of Veterans Affairs has really let people down," says Kristi
Kelly, a consumer lawyer in Virginia who says she is hearing from a lot of other
veterans in the same situation as Ray and Becky Queen.



"The homeowners entered into COVID forbearances, they were made certain
promises, and there were certain representations that were made," says Kelly.
"And the VA essentially pulled the rug out from under everybody."

Enlarge this image

The Queens say they tried to come off their forbearance in February of this year
and resume paying their mortgage. They were both working again. But they ran
into delays with the mortgage company. Michael Noble Jr. for NPR hide caption

toggle caption
Michael Noble Jr. for NPR


The Queens say they tried to come off their forbearance in February of this year
and resume paying their mortgage. They were both working again. But they ran
into delays with the mortgage company.

Michael Noble Jr. for NPR

For some homeowners, ending the program may not mean foreclosure, but it still
means a financial hardship.

"Many of these people have 2 or 3% interest rate loans," Kelly says. With the
PCP program they could keep that interest rate. But now, she says, the only way
they'll be able to save their home is to enter into a loan modification where
the interest rate will be around today's market rate of 7.5%.

"For most people, their payments will increase by $600 or $700 a month, because
the VA has decided to end the partial claim program."

Many homeowners can't afford such a huge increase in their monthly payment.

According to the data firm ICE Mortgage Technology, 6,000 homeowners with VA
loans who had COVID forbearances are currently in the foreclosure process. And
34,000 more are delinquent.

Kelly says most other homeowners in America — people with FHA loans, for
instance, or loans backed by Fannie Mae and Freddie Mac — still have ways to
avoid foreclosure by moving missed payments to the back of the loan term.

But homeowners with VA loans don't, because the VA ended that program. So
veterans are being treated worse than most other homeowners, Kelly said.

"Service members are in a position where they're going to lose their home," she
says. "And for most people, that's everything they work for — and all their
wealth is in their homes."


VA HAS A PLAN TO HELP, BUT IT COULD BE TOO LATE

The Department of Veterans Affairs says it had no choice but to end the program.

"We had a short-term authority for that specific program during COVID," says
John Bell, executive director of the Veterans Benefits Administration's Loan
Guaranty Service. "It wasn't part of our normal authority."

Enlarge this image

"Service members are in a position where they're going to lose their home," says
Kristi Kelly, a consumer lawyer in Virginia. "And for most people, that's
everything they work for — and all their wealth is in their homes." Michael
Noble Jr. for NPR hide caption

toggle caption
Michael Noble Jr. for NPR


"Service members are in a position where they're going to lose their home," says
Kristi Kelly, a consumer lawyer in Virginia. "And for most people, that's
everything they work for — and all their wealth is in their homes."

Michael Noble Jr. for NPR

Some in the industry think the VA did, in fact, have the authority to extend the
program. But either way, it ended it.

Now, though, the VA is taking the situation seriously.

NPR has learned that the VA is working on a new program to replace the old one.
It will work in a different way but to similar effect, to save people from
foreclosure. Bell says it's going to take four to five months to get it up and
running.



That's too long for many of those 6,000 VA homeowners already in the foreclosure
process. Not to mention the many more who are delinquent.

Already, data shows that more VA homeowners have been heading into foreclosure
since the VA ended its PCP program. The same is not true for FHA loans or loans
backed by Fannie Mae or Freddie Mac.




WILL THE FIRETRUCK ARRIVE TOO LATE?

With so many homeowners at risk, there's growing pressure on the VA to stop
foreclosing on veterans until it gets its fix up and running.

"There should be a pause on foreclosures," says Steve Sharpe, a senior attorney
at the National Consumer Law Center. "Veterans should really be able to have an
ability to access this program when it comes online because it's been so long
since they've had something that will truly work.

Sharpe says the VA could also restart the PCP program that it shut down. "They
have the authority to do both," he says.

Pausing foreclosures sounds like a good idea to veteran Ray Queen in Oklahoma.

"Let us keep paying towards our regular mortgage between now and then," he says.
"Then once the VA has that fixed we can come back and address the situation.
That seems like the adult, mature thing to do, not put a family through hell."

Enlarge this image

The Queens are hoping the VA does pause foreclosures until the new program can
offer people help. Michael Noble Jr. for NPR hide caption

toggle caption
Michael Noble Jr. for NPR


The Queens are hoping the VA does pause foreclosures until the new program can
offer people help.

Michael Noble Jr. for NPR

NPR repeated Ray Queen's plea to John Bell at the VA directly. Bell said the VA
is "exploring all options at this point in time."

"We owe it to our veterans to make sure that we're giving them every opportunity
to be able to stay in the home," Bell said.

Wednesday, a group of U.S. Senators sent a letter to the VA urging them to put a
hold on any more foreclosures.

"Without this pause, thousands of veterans and servicemembers could needlessly
lose their homes," Sens. Sherrod Brown, Jon Tester, Jack Reed, and Tim Kaine,
all Democrats, wrote in a letter to VA Secretary Denis McDonough. "This was
never the intent of Congress."



Tester, of Montana, chairs the Veterans' Affairs Committee, and Brown, of Ohio,
chairs the Banking Committee. They asked the VA "to implement an immediate pause
on all VA loan foreclosures where borrowers are likely to be eligible for VA's
new...program until it is available and borrowers can be evaluated to see if
they qualify."

Ray and Becky Queen are hoping the VA does let people keep their homes until the
new program can offer them a way to get current on their mortgages. Because if
the firetruck shows up after the house has burned down, it's not going to do
much good for the thousands of veterans and service members who need help now.

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