Will close the real estate loan rescue program for veterans

Washington – The Veterans Department will end a controversial mortgage rescue program which offers assistance “as a last resort” to veterans confronted with foreclosure and holding loans supported by VA, the agency announced.

The veterans’ purchase program, known as Vasp, will definitively close on May 1, after buying more than 17,000 delinquency loans worth 5.5 billion dollars to keep the veterans at home, said the VA.

Some Republican legislators had opposed the program, which was launched last May, because it implies the VA holding the loan in its own portfolio and therefore puts money from taxpayers in danger.

“The VA veterans’ purchase program, which was created unilaterally by the administration (former president Joe Biden) and lack of conference authority, will stop accepting new registrants,” said Peter Kasperowicz, press secretary of the VA.

Kasperowicz said the VA decided to end the program because the agency is not set up or is not intended to be a mortgage restructuring service.

Under VSP, delinquent mortgages are restructured at an interest rate of 2.5%, which is much lower than the average market rate. The national average this week for a fixed rate mortgage of 30 years is somewhat greater than 6%, according to Bankrate, a consumer financial service company which is investigating the main lenders each week.

The closure of the old annual program with new registrants will not affect current participants or mortgage holders that register before May 1, Kasperowicz said. Veterans do not apply directly to special refinancing. Mortgage agents make requests on their behalf after alternative reimbursement options are exhausted.

“Today, the administration (President Donald Trump) has rightly ended the VAP VAP program,” said Mike Bost representatives, R-ill., Chairman of the Affairs Affairs Committee of the Chamber, and Derrick Van Orden, R-Wis., President of the Subgroup of the Committee on Economic Opportunities.

The VA has not been able to prove that individuals will not intentionally miss their mortgage payments to take advantage of an interest rate of 2.5%, according to the members of the Congress.

But Senator Richard Blumenthal of Connecticut, the best democrat of the senatorial committee of veterans, described the elimination of Vasp as “an act of cruelty and incompetence” towards veterans in severe financial distress which risk losing their homes.

He said that Vasp was launched after the expiration of mortgage reduction programs in the pandemic era and that mortgage interest rates have started to increase.

“This program offers (veterans) options from the last obligation to avoid the emotional and financial crisis that often leads to homelessness,” said Blumenthal.

But Bost and Van Orden said in a joint statement that the Républicains de la Chambre intended to create a partial complaint program to help veterans confronted with foreclosure. A partial complaint program would allow Vertians of financial difficulties to postpone missed payments without cope with a foreclosure.

“This is the good decision of the secretary (VA) (Doug) Collins and the Trump administration to protect the integrity of the VA mortgage program, and the veterans of today and tomorrow will undoubtedly be better because of this,” said Bost and Van Orden.

Last month, Van Orden presented the law on the reform of the VA real estate loan program, which would create a partial complaint program and authorize the secretary to “pay the holder of a guaranteed loan … a necessary amount to avoid the foreclosure of such a loan”.

The Va in turn would guarantee that the GA receives a “guaranteed interest in the property covered by the loan” which serves as a guarantee, according to the language of the bill.

The housing groups and veterans urged the va to not put an end to the VASP without having an alternative in place.

There are around 81,000 soldiers or veterans in active service who have missed three or more payments on their mortgages will, according to figures from the Center for Responsible Lending and the National Consumer Law Center, non -profit consumer protection groups.

The organizations approved a partial complaint program as a solution to help veterans regain the financial base after having lagged behind mortgage payments.