Fact check: Ad exaggerates the benefits of veterans loan program

McKenzie Sadeghi, USA TODAY
·5 min read

The claim: Biden, Congress created a 'generous mortgage relief program' for veterans

As home-sale prices continue to increase across the country, posts claiming Congress established a "generous mortgage relief program" for veterans have surfaced on social media.

The claim follows President Joe Biden's American Rescue Plan Act of 2021, which allocates approximately $10 billion to help homeowners struggling with financial hardships.

One post, titled "BIDEN IS ON A ROLL," claims if veterans can't wait for that assistance, they can take advantage of a relief program from Congress instead.

"If you can't wait around for the assistance, Congress gives veteran homeowners a generous mortgage relief program. You'll be happy when you see how much you could save," says a video posted May 5 by the Veteran Loans Online Facebook page.

The organization is also running paid Facebook ads with a similar claim.

Reviews on the page include numerous complaints that the company gave out personal information to mortgage companies without permission. On Jan. 16, 2020, one user wrote, "click bait taking advantage of veterans."

The video from Veteran Loans Online is misleading as it references a program used to refinance an existing VA loan. It has existed for decades and is not linked to Biden.

USA TODAY reached out to Veteran Loans Online for comment.

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Promotion is misleading

The program referenced by Veteran Loans Online is a loan refinance program that was introduced more than 40 years ago to help homeowners with loans backed by the Department of Veterans Affairs decrease their monthly mortgage payments.

Veterans Loans Online is managed by LowerMyBills, a third-party firm that gathers customers' information and provides it to loan companies, which then issue the loans. In January 2020, Lead Stories debunked a similar advertisement about Congress creating a mortgage relief program for veterans, in which LowerMyBills confirmed the program referenced in the posts is the Interest Rate Reduction Refinance Loan (IRRRL).

The program streamlines the paperwork process for refinancing, but it doesn't give direct access to any veterans-only banks or interest rates. And it has nothing to do with Biden, as the post implies.

"This is your classic bait and switch," said Brian Reese, a former active-duty Air Force officer and expert on U.S. veterans' benefits. "It's false factually and misleading" to present the program and tie it to Biden as the ad does.

Reese said the IRRRL program applies to anyone who has a mortgage loan on their primary residence backed by the VA.

"It is a VA program, and they advertise it, but the VA is not a mortgage lender. You still have to go through an authorized mortgage lender,” Reese said. "Veterans have to make sure they read the fine print before they commit to one of these agreements."

Reese, who is also the founder of VA Claims Insider, said depending on the authorized mortgage lender, there could be additional costs on that loan for refinancing, or other interest rates.

"Every mortgage lender is is different," he said.

On its site, LowerMyBills promotes the IRRRL as requiring "very little paperwork and almost no costs out of your pocket." It does not define it as a "generous mortgage relief program," as the ad does from its affiliate.

The links included in the post, alleging to provide calculations for new house payments, lead to websites with disclaimers that state the company is not a lender or a broker, and information provided by the company is not an application for a mortgage loan.

The IRRRL program, commonly referred to as "streamline," is backed by the Department of Veterans Affairs and was introduced in 1980 by the Veterans' Disability Compensation and Housing Benefits Amendments.

LowerMyBills did not respond to requests for comment.

Groups warn against VA refinance loans

VA refinance loan scams frequently appear online. The Consumer Financial Protection Bureau and VA warn veterans to use caution when they see VA home loan offers that "may sound too good to be true."

"Some lenders marketing VA mortgage refinances may use aggressive and potentially misleading advertising and sales tactics," reads a Nov. 21, 2017, blog post from the consumer group CFPB and VA. "Lenders may advertise a rate just to get you to respond, or you may receive a VA mortgage refinance offer that provides limited benefit to you while adding thousands of dollars to your loan balance."

Warning signs of a scam include extremely low interest rates, skipped mortgage payments, no out-of-pocket costs or waiting periods and thousands of dollars in cash back, according to MilitaryBenefits.info.

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Our rating: Partly False

An advertisement claiming veterans can take advantage of a Biden-related "generous mortgage relief program" created by Congress is PARTLY FALSE, based on our research. The post is referencing the IRRRL program and a pandemic relief bill together, but the two are not connected in any way. The IRRRL is real and has existed for decades as a refinance option that could potentially limit paperwork. But it has no connection to Biden. The benefits of the program largely depend on the third-party mortgage lender, and hidden costs and fees could be included.

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This article originally appeared on USA TODAY: Fact check: Ad exaggerates benefits of veterans loan program