cover of episode The veteran loan calamity

The veteran loan calamity

2024/11/1
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Key Insights

Why did tens of thousands of military veterans face foreclosure after COVID forbearance?

The VA stopped allowing an affordable repayment option, blowing up the on-ramp for veterans to resume mortgage payments.

What was the VA's explanation for removing the affordable repayment option?

They claimed short-term authority for the program during COVID and lacked normal authority to continue it.

How did the VA eventually respond to the crisis?

They paused foreclosures for six months and developed a new program (VASP) to offer affordable mortgage rates.

Why are some veterans still not helped by the VA's new program?

The program only aids those who defaulted, excluding veterans like Natalie who took forbearance but kept making payments.

What is the VASP program intended to do?

It allows the VA to take over veterans' mortgages, offering them a 2.5% interest rate for up to 40 years.

Why did the VA initially fail to act on the foreclosure crisis?

They were developing a new solution but didn't implement it quickly enough, leading to immediate harm.

How did public pressure impact the VA's response?

After a story by NPR, senators questioned the VA, leading to a six-month foreclosure pause for all veterans.

Chapters

During COVID, the VA loan forbearance program intended to help veterans keep their homes malfunctioned, leaving tens of thousands on the brink of foreclosure. Ray and Becky Queen, facing foreclosure, exemplify the issue. Reporters investigated this bizarre problem.
  • VA loan forbearance program failed tens of thousands of veterans.
  • Ray and Becky Queen, an Oklahoma couple, face foreclosure due to the program's errors.
  • Reporters Quill Lawrence and Chris Arnold investigate the issue.
  • The program was meant to help veterans keep their homes during COVID.

Shownotes Transcript

Ray and Becky Queen live in rural Oklahoma with their kids (and chickens). The Queens were able to buy that home with a VA loan because of Ray's service in the Army. During COVID, the Queens – like millions of other Americans – needed help from emergency forbearance. They were told they could pause home payments for up to a year and then pick up again making affordable mortgage payments with no problems.That's what happened for most American homeowners who took forbearance. But not for tens of thousands of military veterans like Ray Queen.On today's show, we follow two reporters' journey to figure out what went wrong with the VA's loan forbearance program. How did something meant to help vets keep their houses during COVID end up stranding tens of thousands of them on the brink of foreclosure? And, once the error was spotted, did the government do enough to make things right?*Today's episode was produced by James Sneed. It was edited by Meg Cramer. And fact-checked by Dania Suleman. Engineering by Cena Loffredo. Alex Goldmark is Planet Money's executive producer.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts) or at plus.npr.org/planetmoney).*Learn more about sponsor message choices: podcastchoices.com/adchoices)NPR Privacy Policy)