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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 44 June 2025 J O U R N A L Default Servicing HOUSE PASSES BILL TO ENHANCE VA LOAN FORECLOSURE PREVENTION MEASURES T he House Committee on Veter- ans' Affairs has announced the passage of HR 1815, the VA Home Loan Program Reform Act, a measure drafted to enhance foreclosure protec- tions for U.S. veterans. HR 1815 would: • Establish a Partial Claim Program through which the U.S. Department of Veterans Affairs (VA) would pay lenders to prevent foreclosure on guaranteed loans that are delin- quent or in default. • Temporarily increase the amounts au- thorized for the Grant and Per Diem Program through which VA awards funding to organizations to provide transitional housing for veterans. Sponsored by Wisconsin Rep. Der- rick Van Orden, the VA Home Loan Pro- gram Reform Act would create a partial claim program as part of the VA Home Loan program to allow veterans who have fallen behind on their mortgages to receive federal assistance. May 1 marked the expiration of the VA's Veterans Affairs Servicing Purchase (VASP) program, a mortgage assistance option that allowed a number of borrow- ers to obtain an affordable payment when delinquent on their mortgage. Launched May 31, 2024, VASP would offer eligible borrowers a fixed 2.5% interest rate, pro- viding a consistent, affordable payment for the remainder of their loan. "This program has worked in the past, keeps vets and their families in their homes, and does so at a fraction of the cost of the horrific VASP program," Rep. Van Orden said. "The VA Home Loan Program Reform Act is not just a fix—it is necessary course correction. I thank Chairman Mike Bost for his support on this legislation and helping it get over the finish line for our vets." On April 23, 2025, the U.S. Depart- ment of Veterans Affairs issued Circular 26-25-2, announcing the termination of VASP as of April 30, 2025, at 11:59 p.m. Effective May 1, 2025, the VA no longer accepts VASP submissions, and the VA announced it has rescinded the prescribed steps for considering vets for hardship assistance. 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 Biden administration was dead wrong to risk the future of VA's Home Loan program by creating the VASP program, and the Trump administration was right to put an end to it. I am proud to have worked alongside my friend, Economic Opportunity Chairman Van Orden, our House Republican col- leagues, and key stakeholders to create the right safety net for veterans who have fallen behind on their mortgage payments," Rep. Mike Bost said. "Our bill is a fiscally responsible solution to ensure that veterans in financial hardship have access to the tools they need to stay in their homes. I look forward to seeing this commonsense, bipartisan bill passed in the Senate and signed into law by Presi- dent Trump as soon as possible." Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA) added, "MBA has been a fierce advocate for distressed veteran home- owners, working with a bipartisan group of lawmakers, Veterans Affairs (VA) staff, and our members to help keep them in their homes since the VA's previous loss mitigation solution was terminated during the pandemic without a replacement.