A report recently issued by the Department of Veterans Affairs’ inspector general found that nearly 53,000 veterans may be eligible to receive $189M in home loan refunds.
Does the federal government owe millions of dollars to disabled veterans? One report thinks so. According to the Department of Veterans Affairs’ inspector general, the government “owes at least $189 million to 53,000 disabled veterans who overpaid on their home loans.” How so? Well, typically veterans taking out mortgage loans have to pay a “funding fee to the lender that usually costs several thousand dollars.” However, that fee is supposed to be “waived for veterans who receive disability compensation.” The VA’s Office of Inspector General discovered that many disabled veterans entitled to the particular benefit have been having to pay the fee regardless, with no reimbursement from the government.
In the inspector general’s report, the office claims the Veterans Benefits Administration failed to protect the veterans’ financial interests. For example, the report found a number of instances where “certificates of eligibility for exemption were outdated, incorrect or missing.” In one case, a “veteran had been receiving disability compensation since March 2011, but it wasn’t correct on his eligibility form, so when he bought a home in September 2017, he was incorrectly charged $5,800,” according to the report. It added that “regardless of the amount, the money should be refunded” to any veterans who qualified for the benefit but still had to pay the fee.
In response to the report, the Veterans Benefits Administration (VBA) agreed to help identify the veterans who paid the fee when they shouldn’t have. However, the VBA was also quick to point out that the “financial impact to the veterans was minimal over the life of the loan.”
In addition to helping identify veterans, the VBA will also begin issuing refunds and the current system will be overhauled so veterans no longer “have to file a claim if they were wrongfully charged the fee.” The IG said the old way of doing things “improperly placed the burden and responsibility solely upon the veteran,” and that is unacceptable. It’s important to note that the report argues the VBA “knew since 2014 that tens of thousands of veterans may have been wrongfully charged the funding fee” and they did nothing to remedy the situation. The report states:
“OIG finds it troubling that senior VBA management was aware that thousands of veterans were potentially owed more than $150 million yet did not take adequate actions to ensure refunds were issued.”
This isn’t the first time the Department of Veterans Affairs has been in hot water, though. Back in 2014, it was involved in a scandal over “long patient wait times at VA health facilities resulting in veteran deaths.”
Sources:
VA owes disabled veterans refunds on home loan fees, report says
VA owes 53,000 veterans $189 million in home loan refunds — are you one of them?
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