When Michelle called us in late 2024, she was afraid of losing her house. A veteran, she’d served almost 5 years in the military where she received medals, ribbons, and other decorations. After her honorable discharge, she married, had a child, and bought a house. At age 41, she lost her job while going through a divorce and she fell behind on her mortgage payments. She collected a small unemployment check while looking for a new job, but it wasn’t enough to provide for herself and her child.
By the time she called us, Michelle was $14,000 behind on her house note. Had she called the bank, attorney Caitlin Corey asked? Yes. Could the bank do anything? Michelle wasn’t sure.
Corey took Michelle’s case. Together, they applied for a short-term unemployment forbearance with her loan servicer. When the forbearance was approved, Michelle finally had a little breathing room. She had four months to come up with a plan. But then what? Would the bank foreclose? Michelle was still looking for work and she had other bills to pay.
Caitlin Corey realized Michelle qualified for the Veterans Affairs Servicing Purchase Program (VASP). Launched in May 2024, the program was designed to address the lingering effects of the COVID-19 pandemic. VASP helped veterans and active-duty service people to keep their homes by restructuring the loans.
Long story short, Michelle kept her home, but the process was complicated. After she got the forbearance, she needed another one. She re-applied and the forbearance was renewed. But then she had to cancel the forbearance so she could get into the VASP program. Then her loan servicer failed to do their part to complete her application for the VASP program. Then the government decided to close the VASP program. So, after all that work, the VASP program was not an option after all.
Undeterred, Ms. Corey steered Michelle through a different process, filed a Notice of Error (NOE), and finally, the loan servicer agreed to a different kind of loan modification – separate from the VASP program. Michelle would have a slightly higher monthly payment going forward, but she could keep the house.
Thanks to Lone Star Legal Aid’s Caitlin Corey, Michelle was able to keep a roof over her and her child’s head. After her mortgage fell into delinquent status, she was able to bring her account current and begin paying again. It took more than a year of complicated negotiations.