The Obama Administration announced a five-point plan on Tuesday to help Veterans who are homeowners and have been affected by the housing and mortgage crisis. The plan is designed to help current, former, and prospective service members by using funds derived from the historic mortgage settlement reached between mortgage servicers, the Federal government, and 49 state attorneys general.
First, mortgage services will review files of all service members who have been foreclosed upon since 2006 to determine if there were violations of the Service members Civil Relief Act (SCRA). Compensation will take the form of a payment of lost equity and interest plus $116,785, or an amount determined by banking regulators.
Second, Veterans who were wrongly charged rates higher than 6% after a valid request to lower their rate under SCRA. Compensation will be four times the amount wrongfully charged. This will apply to all clients dating back to 2008.
Members of the military who are forced to sell their home at a loss due to a permanent change in station may also be compensated for their loss. Mortgage servicers will provide short sales agreements and deficiency waivers to these Veterans and active service members if they are not eligible for the Defense Department’s Homeowners Assistance Program (HAP). This will affect homeowners who purchased homes between July 1, 2006 and December 31, 2008 or who receive a Permanent Change of Station (PCS) after October 1, 2010.
Lastly, $10 million will be allocated to the Veterans Housing Benefit Program and service members receiving hostile fire or imminent danger pay within nine months of their foreclosure.
If you have any questions or would like more information regarding these new mortgage plans, be sure to call your local VA mortgage lender for more information.
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