The White House will proceed with a blunt effect of the medical debt on the mortgages | Debt news

The suitability of the loan will no longer include what applicants, including veterans, owe for previous medical services.

With and Bloomberg

Vice President Kamala Harris will announce new steps designed to reduce the cost of federal mortgage loans to Americans in medical debt and make it easier for veterans to forgive loans, as part of the White House push to help millions facing health care bills.

Efforts will include pushing within the federal government to stop considering medical debt when determining eligibility for loans – including in programs such as the Department of Agriculture’s $ 20 billion rural housing program. Because the government will not consider how much applicants owe on medical expenses, those in debt will have to take advantage of loan terms to buy or build new homes.

The Department of Veterans Affairs also plans to stop reporting debt owed by veterans to the VA for their health coverage at credit bureaus and will modernize programs designed to help former members forgive some of their medical debts. . The department will open a web portal to process apology requests and simplify eligibility criteria in an effort to increase the number of veterans taking advantage of existing debt repayment programs.

One-third of U.S. adults currently have medical debt, with black and Hispanic households more likely to have medical debt than white households, according to the White House.

Harris will make the announcement Monday during an event with White House financial adviser Brian Deese, Health and Human Services Minister Xavier Becerra and Budget Director Shalanda Young, according to a White House official who spoke on condition of anonymity. changes before they are made public. .

The moves come as the White House looks for ways to cut costs for Americans facing soaring inflation during the coronavirus pandemic, leading to some of the highest price increases in four decades. Rising inflation has pushed the Federal Reserve to start raising interest rates, resulting in higher costs for mortgages and consumer credit.

The Biden administration estimates that about one in three American adults has medical debt, which represents more debt collection than credit cards, utilities and car loans combined.

Management’s actions follow previous efforts by leading consumer credit companies Equifax, Experian and TransUnion to pay off medical debts that were either under $ 500 or had been repaid by credit reports.

But more than 11 million Americans are estimated to have more than $ 2,000 in medical debt. The Office of Consumer Financial Protection said in a March 1 report that about $ 88 billion in uncollected medical debt was reported to credit bureaus, accounting for about 58 percent of all uncollected debts in U.S. consumer credit reports.

The CFPB is expected to release a report on consumer complaints about medical charges on Monday and said it was making the prevention of medical debt collection a new enforcement initiative. The agency has previously stated that it is considering whether medical debt should be completely removed from consumer credit reports.

The Ministry of Health and Human Services also announces that it is requesting data from more than 2,000 medical providers on bill collection practices, financial product offers and debt purchase practices. The government says it will start using this information as it sets federal grants, in a bid to prevent hospitals and healthcare facilities from abusive pricing practices.

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