Has anyone dealt with the VA preventing a loan modification for a vet by fouling up the vet's benefits?  I have a case in which a disabled vet is trying to prevent foreclosure of his house, but can't get the servicer to approve a loan modification he can afford for several reasons: 1) the VA won't extend the term of the loan, even though the FDIC loan calculator says he could afford a 40-year loan, even a 33 yr loan; 2) his VA benefits keep changing and though they are going up, have not been enough to afford the loan modification offered so far by the servicer.  Now his VA benefits are going to go up again and he is getting back-pay, which will make the loan modification affordable, but the servicer says it doesn't want to wait until the income is fixed, and that the VA's benefit "hand" is separate from its loan program "hand."

 

The VA is the "investor" on this loan.  Is it the "beneficiary"  or is the servicer?"  Who actually owns the loan?Should I find that the VA is the beneficiary and not negotiating in good faith because it refuses to extend the loan or extend the mediation?  The servicer is the one claiming that the mediation should be closed. It also claims that the VA only guaranties the loan, but clearly that isn't entirely true, since the VA also decides what loan modification can be offered or accepted.  The servicer says it doesn't control benefits, so the VA's errors regarding benefits are not it's problem.  Should I certify that the NPV shows the a modification exceeded the net recovery at foreclosure, allegedly preventing foreclosure, even though the only loan modification the VA will consider (a 30-year loan) does not? 

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