U.S. Representative Kathleen Rice (NY-04) today called on U.S. Department of Veterans Affairs (VA) Secretary Robert Wilkie to issue clarification on the forbearance program available to borrowers with VA-guaranteed home loans during the COVID-19 pandemic to ensure homeowners and veterans who take advantage of this program are not required to make lump sum repayments at the end of a forbearance period.
The letter comes amidst ongoing confusion regarding the various mortgage repayment options available to borrowers through their mortgage servicers. On April 27, the Department of Housing and Urban Development Inspector General outlined this confusion in a report that found Federal Housing Administration servicer websites provided incomplete, inconsistent, and unclear guidance to borrowers related to their forbearance options under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Federal Housing Finance Agency (FHFA) has already issued a clarifying statement that borrowers with mortgages backed by Fannie Mae or Freddie Mac do not need to pay back missed payments from the forbearance period in a single lump sum.
“Despite protections established in the CARES Act, I have heard from too many veterans and homeowners who are concerned they will be required to repay their mortgage payments in a lump sum when their forbearance period comes to an end,” said Rep. Kathleen Rice. “The VA must provide clear and strong clarification so there is no doubt about the variety of repayment options available to borrowers. Our nation’s veterans should not be burdened with navigating a confusing forbearance process during this crisis.”
