Congressman John Sarbanes (D-Md.) and the Maryland Congressional Delegation today expressed concern about recent reports that loan servicers are not allowing veterans with VA Home Loans to access the loan forbearance provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The bill included protection for borrowers with federally backed mortgage loans who are experiencing financial hardships and are unable to make payments due to this COVID-19 crisis. VA Home Loans are covered under this provision.
While servicers are prohibited from forcing lump-sum payments once the forbearance period ends, veterans have reported that servicers have denied their requests, charged additional fees or insisted on lump-sum payments to exit forbearance.
“During these unprecedented times, we must ensure those who sacrificed so much for our nation are being provided for,” the lawmakers wrote. “We must protect veterans from opportunistic and errant lenders. This is an invaluable program and we want to ensure the program remains strong for many years to come.”
In 2019, more than 15,000 veterans in Maryland received a VA Home Loan. Another 7,000 loans have been issued so far in 2020. The VA Home Loan program was created to help service members purchase homes without excessive down payments or prohibitive credit requirements.