Affordable housing advocates and congressional Democrats are warning that more foreclosures may occur as the Department of Veterans Affairs phases out a mortgage rescue program for financially strapped veterans this week. Beginning Thursday, the VA will no longer accept enrollees to the Veterans Affairs Servicing Purchase Program, or VASP, a program established last year during the Biden administration that helps veterans who are in trouble with their mortgages. “We are very worried,” Justin Wiseman, vice president for residential policy at the Mortgage Bankers Association, a nonpartisan group representing the interests of mortgage companies, told CNN. “We don’t like to foreclose on anyone, and especially not on veterans,” Wiseman said. “We’re very worried that without a replacement program for VASP, there will be more foreclosures.” The Center for Responsible Lending (CRL), a nonpartisan, nonprofit research and policy organization that also advocates for fair housing, is sounding a similar alarm, noting in a recent letter to to Congress that tens of thousands of veterans are at risk. CRL wrote that once VASP phases out, if there is not a replacement program or another option, “VA borrowers will face unnecessary foreclosures.” “To be clear, this is not a theoretical exercise,” CRL continued. “As of February 2025, there were about 81,000 active-duty servicemembers or Veterans who had already missed 3 or more payments on their VA mortgages and were in default. Without VASP or immediate access to alternative policy tools that provide relief … many of these homeowners will be forced to sell their homes and move or face foreclosure.” The VA has defended the move, stressing that current enrollees will not be impacted and highlighting other programs it offers to help veterans secure home loans. While the VA has not announced a program to replace VASP, Republicans in Congress are pushing for the creation of an alternative program that would allow struggling borrowers to still receive federal assistance. Republicans offer alternative The VASP program was announced in May 2024. It purchases financially troubled veterans’ loans from outside mortgage companies and modifies those loans, including reducing the interest rates in order to help struggling veterans avoid foreclosure and eviction. In less than a year since VASP has been active, the VA says it has purchased more than 17,000 loans, worth more than $5.48 billion. In 2022, the VA ended a similar program for rescuing veterans’ mortgages placed at risk by the Covid-19 pandemic, which prompted the agency to launch VASP. The phasing-out of VASP comes as the VA undergoes a massive reduction in force, which VA Secretary Doug Collins has said is targeting roughly 70,000 agency employees for termination. In a statement to CNN regarding the ending of the VASP program, the VA said, “This change is necessary because VA is not set up or intended to be a mortgage loan restructuring service.” Some Republican lawmakers are applauding the conclusion of the program, which they have criticized as reducing interest rates for struggling veterans at the expense of taxpayers, and proposing the creation of an alternative program. Illinois Rep. Mike Bost and Wisconsin Rep. Derrick Van Orden are pushing for the establishment of what’s known as a partial claims program at the VA, which would offer struggling home-owners an interest-free loan to cover their unpaid payments before adding the cost to the end of their mortgage. “We had serious concerns about the impact VASP would have on not only the future of VA’s home loan program, but the mortgage lending business as a whole,” Bost, who chairs the House Veterans Affairs Committee, and Van Orden, who oversees the Subcommittee on Economic Opportunity, said in a statement to CNN. “The Trump administration rightfully put an end to VA’s VASP program,” they said. “This action underscores House Republicans’ intent to establish a partial claims program at VA to ensure veterans can stay in their homes if they’re in financial hardship while still protecting the American taxpayer.” ‘Cruel’ and ‘wrong’ Democrats on Capitol Hill are dismayed, saying veterans should have a viable alternative before the VA ends the program. “VA is taking a misstep that will push thousands of veterans into foreclosure,” several Democrats, led by ranking member of the Senate Veteran Affairs Committee Richard Blumenthal, said in a recent letter to Collins. “This is cruel, wrong, and runs counter to the benefits earned by veterans,” they said. The VA stresses current enrollees will not be impacted and says there are other programs available to veterans. In an email to CNN, VA press secretary Peter Kasperowicz said the phase out “will not affect any of the program’s existing participants, nor will it impact any eligible Veterans who complete their VASP enrollment prior to May 1, 2025.” Kasperowicz said the VA continues to offer “an array of housing assistance options designed to help Veterans,” and referred CNN to a variety of VA programs to help veterans get home loans. Meanwhile, Veterans of Foreign Wars, a nonprofit organization supporting veterans, has been telling its members to take action ahead of the phase out. “As soon as we received the information from VA last week about VASP, we informed our members and audiences through our online platforms and encouraged those facing foreclosure to speak to their lenders before the deadline,” Rob Couture, director of public affairs for the VFW Washington Office, told CNN in a statement.
Housing advocates ‘very worried’ veterans could face foreclosure as VA mortgage rescue program phases out
TruthLens AI Suggested Headline:
"Concerns Rise Over Potential Foreclosures as VA Phases Out Veterans Mortgage Rescue Program"
CNN
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TruthLens AI Summary
Housing advocates and congressional Democrats are expressing significant concern over the potential increase in foreclosures among veterans as the Department of Veterans Affairs (VA) phases out its mortgage rescue program, the Veterans Affairs Servicing Purchase Program (VASP). This program, initiated during the Biden administration, was designed to assist financially struggling veterans with their mortgage payments. Starting this week, the VA will cease accepting new enrollees into VASP, raising alarms among advocates who fear that without a replacement initiative, many veterans could face foreclosure. Justin Wiseman, the vice president for residential policy at the Mortgage Bankers Association, emphasized the dire implications of this decision, stating, "We’re very worried that without a replacement program for VASP, there will be more foreclosures." The Center for Responsible Lending has echoed these concerns, highlighting that a significant number of veterans are already in default on their loans, with around 81,000 active-duty servicemembers or veterans having missed three or more payments as of early 2025. The group warns that the discontinuation of VASP without adequate alternatives could lead to unnecessary foreclosures and displacement for these individuals and families.
In response to the phasing out of VASP, the VA has defended its decision, asserting that it is not structured to act as a mortgage loan restructuring service and emphasizing that current enrollees will not be affected. While Republican lawmakers have supported the end of VASP, expressing concerns about its impact on taxpayers, they are advocating for a new program that would assist struggling veterans. Proposals include a partial claims program that would allow veterans to receive interest-free loans to cover overdue payments. Meanwhile, Democrats have criticized the VA's actions, arguing that the lack of a viable alternative risks pushing thousands of veterans into foreclosure, which they deem "cruel" and "wrong." The debate continues as various stakeholders, including the Veterans of Foreign Wars, are urging veterans to seek help from lenders before the program's termination takes full effect, highlighting the urgency of the situation for many veterans facing financial hardship.
TruthLens AI Analysis
The article highlights the growing concerns among housing advocates and congressional Democrats regarding the potential rise in foreclosures among veterans as the Department of Veterans Affairs (VA) phases out a mortgage rescue program. The Veterans Affairs Servicing Purchase Program (VASP), which was implemented to assist financially struggling veterans, will no longer accept new enrollees, raising alarms about the lack of alternatives for those in need.
Concerns from Housing Advocates
Housing advocates, including representatives from the Mortgage Bankers Association and the Center for Responsible Lending, express their grave concerns regarding the imminent discontinuation of VASP. They emphasize that this phase-out could lead to unnecessary foreclosures for many veterans who are already facing financial hardships. The article cites statistics showing that a significant number of veterans are already in default on their mortgages, illustrating a real and immediate threat rather than a theoretical concern.
VA's Position and Alternative Programs
While the VA defends its decision by asserting that current enrollees will not be impacted and that there are other programs available to assist veterans, the lack of a direct replacement for VASP raises questions. The absence of a clear alternative could lead to confusion and anxiety among veterans who might be unaware of other resources. The potential for increased foreclosures presents a pressing issue that could further burden those who have served in the military.
Political Implications and Community Support
This news piece aims to generate public awareness and concern regarding the financial stability of veterans. By highlighting the potential negative consequences of the VASP phase-out, the article seeks to rally support for alternative solutions and legislative action from Congress. The focus on veterans also appeals to a broad spectrum of the community, particularly those who advocate for fair housing and veterans' rights.
Economic Impact and Market Reactions
The implications of this news could extend to broader economic and political spheres. If foreclosures rise, this could lead to a ripple effect in housing markets, potentially impacting related sectors and stock prices of companies involved in real estate and mortgage lending. Investors may react to these developments, particularly if there is a perceived risk of increased foreclosures leading to financial instability.
Trustworthiness of the Information
The article appears to be rooted in factual data and credible sources, such as statements from housing advocacy organizations and statistics regarding veterans in default. However, the framing of the issue may evoke a sense of urgency that could be viewed as manipulative, depending on the reader’s perspective. The language used emphasizes the risks and potential consequences, which could provoke a strong emotional response from the audience.
In terms of AI involvement, while it is unclear if AI tools were directly used in the writing of this article, the structure and clarity suggest an organized approach to presenting complex information. If AI were involved, it may have influenced the narrative style to ensure clarity and emphasis on key issues.
Overall, the article effectively raises awareness about a significant issue affecting veterans and encourages public discourse on potential solutions.