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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 74 May 2025 J O U R N A L streamlining, and simplifying existing programs to serve the American people at the highest standard. It creates the opportunity for greater partnership and collaboration across levels of government by requiring states and localities to have skin in the game and carefully consider how their policies hinder or advance goals of self-sufficiency and economic prosperity. Importantly, it furthers our mission-minded approach at HUD of taking inventory of our programs and processes to address the size and scope of the federal government, which has become too bloated and bureaucratic to efficiently function. I look forward to continuing budgetary conversations in the months ahead as we get our fiscal house in order and maximize HUD's budget for the rural, tribal, and urban communities we are called to serve." VA TERMINATES FORECLOSURE ASSISTANCE PROGRAM M ay 1 marked the expiration of the Veterans Affairs Servicing Purchase (VASP) program, a mortgage assistance option that allowed a number of borrowers to obtain an affordable payment when delinquent on their mortgage. On April 23, 2025, the U.S. Depart- ment of Veterans Affairs (VA) issued Circular 26-25-2, announcing the termi- nation of VASP as of April 30, 2025 at 11:59 p.m. Effective May 1, 2025, the VA will no longer accept VASP submissions, and the VA announced it is rescinding the pre- scribed steps for considering veterans for hardship assistance, removing consisten- cy, and transparency from the process. According to NPR, nearly 90,000 VA loans are seriously past due, with 33,000 of those already in the foreclosure process. The National Consumer Law Center (NCLC) reports that as of April 1, there were 75,000 veteran borrowers who had missed three or more payments on their VA-guaranteed mortgage. Among those, the VA reported that 17,000 had been accepted for VASP. "The men and women who wore our nation's cloth have faced adversity and challenges while defending our freedoms around the world. The last thing we should do is turn our backs on them when they need help staying in their homes," said Raul "Danny" Vargas, Founder, Chairman, and CEO of the American Latino Veterans Association. The VASP program, launched on May 31, 2024, was designed to assist veterans experiencing severe financial hardship in avoiding foreclosure and remaining in their homes, with eligible borrowers given a fixed 2.5% interest rate, providing a consistent, affordable payment for the remainder of their loan. From 2021-2022, the VA had a sep- arate hardship assistance program in which delinquent borrowers could put a past-due balance at the end of the loan. This approach, known as the "partial claim," was similar to one offered by the Federal Housing Administration (FHA). A partial claim allows veteran borrowers to bring their loan current and resume their former payment. The borrower repays the deferred amount to VA when the loan pays off at 0% interest. Congress is currently considering legislation to restart a partial claim program at VA. "Today's cancellation of the VASP mortgage assistance program for Veteran borrowers puts tens of thousands of vet- erans and their families with VA home loans at great risk of losing their homes," said Alys Cohen, Senior Attorney at the NCLC. "The VA Home Loan Program is a benefit that Veterans have earned through service and sacrifice—it is meant to give them housing stability they deserve." Those qualifying for VASP must have met the following criteria: » The loan is three to 60 months delin- quent when a servicer submits it into the program. » The owner of the property or an immediate family member is living on the property. "Today's cancellation of the VASP mortgage assistance program for Veteran borrowers puts tens of thousands of veterans and their families with VA home loans at great risk of losing their homes." —Alys Cohen, Senior Attorney, NCLC