On May 1, the Department of Veterans Affairs terminated the VA Servicing Purchase program (VASP), a crucial mortgage-rescue tool that has kept nearly 20,000 veterans in their houses. Now, these veterans face the risk of foreclosure in the tens of thousands, due to the sudden shutdown of the VASP. VASP was an initiative by the Biden administration, enabling VA to buy the delinquent loans from mortgage companies, restructure them at low interest rates, and permit veterans to find a manageable way to catch up on missed payments.
Foreclosure risk on the rise
According to ICE, a data analytics company, there were nearly 90,000 VA-backed home loans seriously delinquent, more than 33,000 in foreclosure proceedings. All options are extremely limited in consideration of the costs, compared to most homeowners with Fannie Mae or FHA loans, for a veteran who is falling behind on payments without VASP. In fact, many veterans were using the VASP program especially with interest rates hovering around 7% and regular refinancing becoming an impossible route of help for many.
Limbo of veterans
Veterans like Kevin Conlon, a former Army combat soldier from New York, are now threatened with homelessness. Conlon and his wife have been living in their house for twelve years using their VA loan after two tours in Iraq and a long struggle with PTSD. They have been told to make no payments while waiting for assistance after VASP went away. It has pushed them further into delinquency. ”We’ve really paid enough,” Conlon told NPR. ”I would have been willing to die for what I believed in. And now we could lose everything.”
Republican pushback and stasis
Republicans such as Rep. Mike Bost and Rep. Derrick Van Orden support the demise of VASP over considerations of taxpayer loss. The reservists of the VA should not hold the restructured loans on its books, as the said lawmakers argue. A substitute program proposed by Van Orden, called “partial claim,” would postpone the payment of missed amounts to the end of a loan’s term. This is yet to go through, and as of present, no replacement exists.
Veteran advocates sound alarm
Organizations engaged in activism, such as the Center for Responsible Lending and the National Consumer Law Center, cautioned that without a new program, many more veterans would face avoidable foreclosure. In a letter to Congress, the groups wrote that losing VASP without another option could force veterans to sell their homes or face eviction.
Frustrated and in Anguish: The view of the vets
Many veterans are saying they feel betrayed by the VA. Samuel McCrary, a Marine vet in Georgia, was in the middle of applying for VASP when suddenly, it was declared closed. “I think we’re going to lose the house,” he said. Others who are still enrolled in the restructuring trial period are concerned about the availability of funds to complete their restructuring.
With uncertain future
The VA has been less than clear on what funding may still be available, or how many other vets will actually be served. Meanwhile, the clock runs, seemingly fast, on thousands of veterans who are indigent and waiting for relief by a system that promised support but failed to deliver.
