VA Loans and Natural Disasters

According to the Center for Research on Epidemiology of Disasters, natural disasters were up 233 percent during the period 2000 to 2009 as compared to 1980 to 1989, and up 67 percent from 1990 to 1999. Whether it’s hurricanes, earthquakes, tornadoes, floods, or lava eruptions, if you’re a homeowner with a Veteran’s Administration (VA) loan, your property is at risk if the unexpected occurs.  Here’s what to do if disaster strikes.

     1. Call your mortgage lender. If your area has been hit hard, resist the urge to contact the VA directly. They don’t hold your mortgage loan – they only insure it. Your first action step would be to contact your lender directly if you experience a loss. Even if you’re a victim of a crisis outside of your control, you’re not excused from making your monthly mortgage payments. If you can’t make them on time, your lender can offer you forbearance – a temporary reduction in your monthly payments – or a mortgage loan modification. Your lender will also inform you of their policies regarding payments from insurance companies and property repairs.

     2. Notify your insurance company. Contact the company that holds your homeowner’s insurance policy immediately, as they’ll be responsible for giving you the financial means to rebuild. Neither the VA nor your bank is directly involved in this process. The VA advises that holders of VA loans should not necessarily accept the first offer that the company makes, as it’s important for homeowners to understand the full extent of the damage. Get independent estimates from at least two licensed contractors. This way, you’ll know if the insurance money being offered will cover the damage. Any checks that you receive should be payable to both you and your mortgage company.

    3.  Get help from the Federal Emergency Management Agency (FEMA). FEMA is the federal agency responsible for being the first responders for national disasters. If they say that your home is in a disaster area, you’ll need to apply for assistance within a certain deadline in order to qualify for aid. Make sure you know what it is, and get your application in before it passes. You can contact FEMA by phone (800-621-FEMA) or through their website.

     4.  Locate other veteran’s organizations for help. The VA isn’t the only agency to rise to the occasion if a disaster occurs. Here’s a list of other organizations that may offer help:

• The American Legion
• Disabled American Veterans
• Veterans of Foreign Wars

     5.  Contact your creditors/benefit providers. If you need to relocate and have a temporary address change, contact everyone you do business with and give each one your new info. It would be an additional tragedy if you got into credit trouble because you didn’t pay your bills on time. Also, if you’re receiving social security or VA benefits via a monthly check, you want to make sure that you’ll continue to receive them.

Disasters do enough devastation to your environment. But by following the above guidelines, you can minimize the disaster to your financial life, and be back to normal in as timely a fashion as possible.