VA Extends Mortgage Relief to Veterans Affected by Gulf Oil Spill

Fri, Jul 2, 2010


By: Carrie Bay

The Department of Veterans Affairs (VA) has joined federal agencies Fannie Mae and Freddie Mac in offering mortgage relief to borrowers who may be impacted by the BP oil spill still ravaging the Gulf Coast.

The VA recently issued a notice to servicers of VA-guaranteed home loans instructing them to “extend every possible forbearance to veterans experiencing difficulties” because of the oil spill crisis.

“The situation in the Gulf of Mexico is a widespread disaster caused by human actions and is continuing to

directly impact significant areas of the Southeastern United States,” the VA said. “Some predictions indicate many more areas could be directly affected as the oil continues to spill, while the impact of the crisis may indirectly affect borrowers throughout the country, especially those with commercial ties to the Gulf States.”

The federal agency says borrower counseling will help servicers determine whether a homeowner’s difficulties are directly or indirectly related to the crisis, or whether they stem from other reasons.

The VA is instructing servicers to consider a borrower’s payment history and the age of the loan in their evaluations.

The agency says forbearance should be extended “for those borrowers with excellent records who are suddenly in distress due to the crisis. Even borrowers with less than excellent payment records should be afforded additional opportunities to resolve their issues,” the VA’s guidance reads.

The VA is also encouraging its servicers to waive late-payment charges and suspend derogatory credit reporting on borrowers affected by the oil spill.

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