Ray and Becky Queen live in rural Oklahoma with their kids (and chickens). The Queens were able to buy that home with a VA loan because of Ray's service in the Army. During COVID, the Queens – like millions of other Americans – needed help from emergency forbearance. They were told they could pause home payments for up to a year and then pick up again making affordable mortgage payments with no problems.That's what happened for most American homeowners who took forbearance. But not for tens of thousands of military veterans like Ray Queen.On today's show, we follow two reporters' journey to figure out what went wrong with the VA's loan forbearance program. How did something meant to help vets keep their houses during COVID end up stranding tens of thousands of them on the brink of foreclosure? And, once the error was spotted, did the government do enough to make things right?Today's episode was produced by James Sneed. It was edited by Meg Cramer. And fact-checked by Dania Suleman. Engineering by Cena Loffredo. Alex Goldmark is Planet Money's executive producer.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
What is the veteran loan calamity?
The way we were explained it is, It would be a fairly simple process. You start making payments again and you're done.
And to be clear, this is a very normal way to restart payments after forbearance. And the vast majority of homeowners who had trouble during COVID were able to resume making their mortgage payments in some affordable way. But a lot of military veterans with VA loans were not able to do that.
When the Queen's forbearance period was up, when they got their repayment options, that simple, affordable version of forbearance where you just move the missed payments to the back of the loan, it was nowhere to be found.
So they were told they could pay back all of their missed payments all at once, $22,000, which they didn't have, or they could do what's called a loan modification, but rates had gone way up. I mean, mortgage rates had doubled, and that meant if they did a loan mod, their payments were gonna go up by a huge amount.
They couldn't afford any of those options. And after arguing on the phone for months with their mortgage company, saying this wasn't supposed to be the deal, they eventually realized they're going to be facing foreclosure.
And when I tell you that my heart dropped and, like, my hands were shaking and, honest to God, I... It was scary. I was at work and I ended up leaving and telling Ray that, you know, I needed to talk to him before the kids got home from school because that was not something that the kids needed to hear.
I mean, when I talked to Ray and Becky Queen, they were very close to foreclosure. I mean, you start getting letters in the mail that say, like, we're going to foreclose on your house. You know, there's not much time left. And they were scared and angry and confused.
And now we're at the point where we've got to figure out what, you know, do we just do we give up and give in? Do we give up our property and and walk away? And this is supposed to be a program that you're that y'all. So what was happening?
The clock was ticking on the Queen's home. Chris starts calling, like, everyone, trying to get an answer to what exactly is going on here. I can't remember exactly. One thing led to another, and I finally found a guy. We'll call this person a well-positioned source. And Chris wound up talking to a bunch of people to confirm everything. But yes, he found a guy.
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