VA Provides Cash Relocation Assistance for Foreclosed Veterans

VA Provides Cash Relocation Assistance for Foreclosed Veterans

veteran house

by Chris Birk on February 2, 2011

The recession has taken a heavy toll on homeowners nationwide, and America’s service members haven’t been spared.

But veterans who lose their homes to a short sale or a deed-in-lieu of foreclosure will now have some financial cushion to help them rebound.

The VA has authorized mortgage servicers to provide veterans with up to $1,500 in relocation assistance. Borrowers can use the money to cover moving expenses and other costs associated with the change in their living status.

Relocation assistance is the VA’s latest effort to help service members on the edge. The agency has for years incentivized mortgage companies to exhaust all alternatives when veterans are in jeopardy of losing their homes.

“VA has a longstanding policy of encouraging servicers to work with veteran borrowers to explore all reasonable options to help them retain their homes or, when that is not feasible, to mitigate losses by pursuing alternatives to foreclosure,” according to the two-page VA circular released on the subject. “These options generally provide a substantially better outcome than a foreclosure sale for borrowers, investors and communities.”

Veterans won’t receive the funds as part of their home’s overall sale. Mortgage servicers will be reimbursed by the VA.

While service members have certainly been hit by foreclosure, overall they represent one of the most committed and secure borrowing demographics on the market. Paying bills on time and staying out of debt are almost ingrained pillars for most service members.

In fact, VA loans in particular have proved especially safe in face of recession. They continue to have the lowest rate of foreclosure of any major loan program, an exemplary achievement given the fact that 90 percent of all VA loans come with no down payment.

Photo thanks to Universal Pops under creative common license on Flickr.

Chris Birk is director of content and communications for Military United, one of the nation’s leading financial services providers for service members and their families. His work has appeared in dozens of publications, from the Chicago Sun-Times and Insurance Journal to Motley Fool and About.com.

{ 7 comments… read them below or add one }

melody yurchison February 6, 2011 at 6:48 am

`QUESTION—I HAD TO WALK AWAY FROM OUR HOME IN NORTH VERSAILLES PA. SINCE MY HUSBAND DIED THEY FORECLOSED ON OUR HOME. WITH WHAT LITTLE I GET I COULD NOT AFFORD TO STAY THERE. IT WAS JUST TOO COSTLY. SINCE THEN I HAD TO MOVE IN WITH MY SON TO A TINY BEDROOM. IS THERE A WAY THAT I AM ELIGIBLE FOR ANY OF THAT MONEY TO GET MYSELF SETTLED? I DONT KNKOW WHAT WILL HAPPEN BUT IT IS WORTH A TRY. I AM CURRENTLY LOOKING INTO VA LOANS TO UPGRADE HIS HPOME SO AS TO ACCOMIDATE US–HE HAS 1 CHILD AND 1 ON THE WAY. OK THANKS FOR THE INFO–LET ME KNOW

SINCERELY

MELODY YURCHISON

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Audrey Beebe February 7, 2011 at 7:52 pm

Melody,
The way these funds are acquired is at the time of the foreclosure from the mortgage service provider. The provider then gets reimbursed from the VA. A good bet would be to return to the mortgage service provider with whom you had to deal on your home’s foreclosure and see if they will coordinate for you to receive these assistance funds.

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Karl Bachman August 17, 2011 at 11:49 pm

After over two years of trying to work with Countrywide/B of A, our home was forclosed on. We provided all requested documents( health hardship/loss of employment/proof of disability income,etc. etc.)We want to stay in our home desprately.The banks just don’t care about anything but money.With the banks having some many properties vacant why are they so unwilling to accept something rather then incur all the costs involved with foreclosure? Does the VA offer any assistance to a veteran who finds themself in my position? This occured 10 days ago so any help to point us in the right direction would be very helpful.
Thank you for any help,
Karl Bachman 8/17 2011

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Audrey Beebe August 18, 2011 at 2:12 pm

Karl,

We offer sincere sympathy for your situation. Sadly I don’t have any miracle answer. This link though, is a short write up from the VA about what they can try to do to help, even if your loan is not a VA backed loan. Read through it an maybe it will offer a new avenue of help for you. Additionally, at the bottom of the page is a phone number for the VA home loan folks, be sure to give them a call.

http://benefits.va.gov/homeloans/docs/delinquent_veteran_borrowers_in_delinquency.pdf

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chris franklin October 23, 2011 at 5:07 am

I went through a divorce a year ago and my ex was awarded the house we had, but it was financed with a VA loan in only my name. I found out she hasn’t payed a note in 13 months and now its in foreclosure, I am trying to find out what I can do to not lose my benefits that I worked my brains out for??

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Ron Mitchell February 19, 2012 at 9:58 pm

I recently had my home foreclosed on. The mortgage company that purchased my home made an offer. Unfortunately for me, I was unable to move out of the home by the due date the purchasing mortgage company gave. I’ve since moved out of the home. However, the mortgage company will does not want to honor the offer because I didn’t get moved out in time. I was informed that they’re going to just wait for the eviction process to run its course. Is there another avenue that can be taken to receive some form of relocation assistance? Right now I’m currently living with a friend, in order to avoid homelessness. Please status back with me at your earliest convenience. Thank you in advance. 02-19-2012

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mo June 12, 2012 at 1:38 am

My father in law owns his manufactured home. rents a slot. He lives hour round trip minimum. we would like him living closer. his getting older, lives alone, his wife passed 2 years back, he doesnt have friends that live near by. we would feel he was safer closer to us. Are there any such funds in moving his home to a lot in our town, closer?

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