[fnordpiglet]

No, they have fixed rate loans, but were unable to make some payments. You can usually arrange in a time of need to defer payments by arranging the current payments to the end of the loan term for some finite number of payments. These people did that.

However the authority of the VA to offer that was a short term emergency authority. While many loan originators offer this as standard practice the VA only offered it during COVID.

When the authority ran out, everyone with deferred payments were suddenly required to pay them IMMEDIATELY in full or lose their home.

An option would be to refinance it reterm the home, but that requires resetting the interest rates to what is now more than double what they originally financed their loans for.

According to the article people were assured by their servicers that this scenario would not happen. It seems inexplicable the VA offered such a program that had a sudden termination date in the near future would would totally invalidate the structure of the program from deferment to immediate lump sum payment.

As such, it really isn’t the fault of the borrower, or even the servicers. They read the fine print and signed up knowingly. It’s the fault of the VA for offering something that they couldn’t offer.