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December 2023 » thefivestar.com 63 December 2023 J O U R N A L basis points from Q2 2023, and seven basis points lower than one year ago, marking the lowest foreclosure inven- tory rate since Q4 2021. » The non-seasonally adjusted seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 1.52%, the lowest level since 1984. It decreased by nine basis points from last quarter and decreased by 38 basis points from last year. The seriously delinquent rate decreased five basis points for conven- tional loans, decreased 37 basis points for FHA loans, and decreased 16 basis points for VA loans from the previous quarter. Compared to a year ago, the seriously delinquent rate decreased by 31 basis points for conventional loans, 92 basis points for FHA loans, and 52 basis points for VA loans. » The five states reporting the largest quarterly increases in their overall delinquency rate were: South Dakota (124 basis points), New Mexico (61 basis points), Hawaii (54 basis points), Mississippi (49 basis points), and Loui- siana (49 basis points). "The decline in later-stage delin- quencies, along with a foreclosure starts rate of 0.14%—which is well below the historical quarterly average of 0.40%— suggest that distressed homeowners may be utilizing available loss mitigation options that prevent a foreclosure start," Walsh said. "Additionally, accumulated home equity may also be enabling some homeowners to sell their homes well before foreclosure becomes a possibility." VA ISSUES MEASURE TO PROTECT VETS FROM FORECLOSURE T he U.S. Department of Veterans Affairs has called on mortgage servicers to pause foreclosures until May 31, 2024. The pause will provide VA borrow- ers with an opportunity to access the upcoming VA Servicing Purchase (VASP) program. Through VASP, the agency will modify and purchase qualifying loans in default to provide meaningful payment assistance to VA borrowers in financial distress. "The foreclosure pause is badly needed as veteran borrowers have had no meaningful alternatives to foreclosure for over a year," said Steve Sharpe, Senior Attorney at the National Consumer Law Center (NCLC). "We applaud VA and the Biden administration for taking neces- sary steps to protect veteran families, and we look forward to the release of VASP." Consumer advocates at the NCLC and the Center for Responsible Lend- ing (CRL), along with U.S. Senators Jon Tester, Sherrod Brown, Jack Reed, and Tim Kaine, had urged the VA to pause foreclosures until its VASP program is effective and widely available. "The VA's foreclosure pause is critically important for giving Veteran borrowers a path to avoid foreclosure. We now urge VA to ensure that VASP will be broadly available and provide relief that many VA borrowers need, especially in the current high-interest-rate environment," said Kanav Bhagat, Consultant to the CRL. "The VASP program will give tens of thousands of active-duty servicemem- bers and veterans the assistance they have earned through their service, allow them to remain in their homes, and avoid foreclosures." Earlier this year, NCLC and CRL provided comments to the VA urging expansion of home retention alternatives for borrowers with VA-guaranteed loans who are facing financial difficulties. The comments explained that the VA's current system fails to provide relief and will unnecessarily cause some active-du- ty servicemembers and Veterans to lose their homes. The comments also urged the VA to avoid placing unneeded and burdensome procedural barriers on borrowers trying to access the relief. Senators Tester, Brown, Reed, and Kaine sent a letter to Denis McDonough, Secretary of the U.S. Department of Veterans Affairs, calling for foreclosure relief for veterans. "[Tens] of thousands of veterans and servicemembers are left with no viable options to get back on track with payments and save their homes. Stories from across the country show that this is already having severe consequences for "The increase in unemployment will likely mean further increases in mortgage delinquencies, particularly for FHA borrowers." —Marina B. Walsh, CMB, VP of Industry Analysis, MBA