VA Announces Special Relief During Government Shutdown
The Department of Veterans Affairs has issued a new VA Circular announcing special relief for VA borrowers affected by the government shutdown. According to the VA Circular titled, “Special Relief Following the Federal Government Shutdown” the VA has issued a loan forbearance request for participating VA lenders.
“Directly affected by the Federal Government shutdown are government employees, whether furloughed or otherwise not receiving pay due to the shutdown” the circular begins, adding, “Many others have been indirectly affected, including those reliant on income from government employee spending or government-related contracts.”
“VA encourages holders of guaranteed loans to extend special forbearance to borrowers in distress as a result of the Federal Government shutdown. Careful counseling with borrowers should help determine whether their difficulties are directly or indirectly related to the shutdown, or whether they stem from other sources that must be addressed. The proper use of authorities granted in VA regulations may be of assistance in appropriate cases.”
The VA special relief announcement also includes a request for lenders to waive late charges associated with financial difficulty because of the government shutdown. “VA believes that many servicers plan to waive late charges on loans where the borrower(s) suffered a loss of income due to the shutdown. VA also encourages all servicers to adopt such a policy for any loans that may have been affected due to the ripple effect of the shutdown”.
Borrowers who find themselves in financial trouble as a result of furloughs, delayed pay or other financial trouble related to the government shutdown should get in touch with their loan officers and the Department of Veterans Affairs as soon as possible to avoid loan default or other problems.
While this all affects current VA borrowers, those who are considering a VA mortgage loan should know that VA loans are still available to qualified borrowers in spite of the government shutdown. There has been no interruption of VA loan services even though some government offices may be closed or are experiencing reduced staffing until the shutdown crisis has been settled once and for all.
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