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Help for Veterans Facing Foreclosure

Although the celebration of Veterans' Day honors those who have served our country, many civilians and congressmen alike feel that more needs to be done to honor and enhance the lives of those who have served.  On September 22, 2010, Representative Tim Walz (D-MN) and Senator-elect John Boozman (R-AR) introduced the Veterans' Homelessness Prevention and Early Warning Act of 2010. The congressmen hope to decrease veteran homelessness by implementing a stronger level of VA support for those facing foreclosure on their VA loan, including increased early warning programs. 

The VA essentially provides insurance, or a subsidy in the event of borrower default, for VA loans. The VA, however, does not directly provide or service the loan. The VA's guarantee of each loan is what allows military members and certain military personnel spouses to receive VA loans with competitive and exclusive benefits with zero money down.  

When asked about his motivation for authoring the bill, Representative Walz  had a very blunt answer. “American heroes living on the streets, out of cars and on the couches of family members is a disgrace,” said Representative Walz. “These men and women fought for our country and we must do everything we can to address their unique needs, which all too often are a contributing factor in homelessness amongst this population. 

Although the VA home loan program has continued to help many veterans and active duty service members achieve homeownership, 15,145 VA loans were still foreclosed upon in 2009 - a number that has nearly doubled since 2007.  The new legislation would prove beneficial to military homeowners in the Louisville metro area, near Fort Knox, as these areas could be hurt if VA foreclosure rates continue to rise. 

Under the new act, the VA will have to take necessary actions to avoid further veteran or active duty personnel homelessness.  Measures the VA will have to take include:

  • Provide alerts to VHA homelessness case managers within 7 business days of being notified of a VA home loan defaulting
  • Ensuring that each VHA case manager is able to provide alternate housing for veterans and his or her family should the veteran lose his or her home
  • Submits a plan for the Act within 6 months of enactment, and will have the regulations in place within one year of enactment.
“Homelessness is a serious problem amongst our nation's veterans,” stated Senator-elect Boozman, the former Ranking Member of the House VA Economic Opportunity Subcommittee. “This simple coordination can ensure that our veterans have access to the assistance they need to confront the challenges of the current economic environment.”

About the Author James Kelley of VA Benefit Blog - A law school student at the University of Missouri, James Kelley works to educate the public on government financing options for home purchases. He is a co-founder of Military Basebook, a facebook application that helps connect military members based on where and when they served.

If you are a Veteran or Active-Duty member of the Armed Forces and are considering buying a home in the Louisville, KY area, please visit Real Estate Louisville, KY.

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