VA Ends Mortgage Rescue Program for Veterans, Raises Foreclosure Concerns

The Department of Veterans Affairs has ended the VA Servicing Purchase (VASP) program, which had helped about 20,000 veterans avoid foreclosure by converting missed payments into a new low-interest loan owned by the VA. This move comes as nearly 90,000 VA-backed home loans are seriously past due, with tens of thousands already in foreclosure, leaving many veterans with few viable alternatives. The program, created during the Biden administration in response to VA missteps, faced criticism from Republicans in Congress who argue it lacked congressional authority and placed too much taxpayer money at risk. Housing advocates, mortgage industry groups, and veterans organizations warn that ending VASP without a replacement will lead to significant increases in veteran foreclosures, attributing some of the current crisis to VA's earlier handling of forbearance options. While the VA has stated that current participants in VASP will not be affected and highlighted other support programs, stakeholders remain concerned about the absence of an immediate replacement and urge Congress to act swiftly. The situation has prompted bipartisan calls for legislative solutions to prevent further harm to vulnerable veteran homeowners.