CONGRESS SEEKS TO CUT VASP, THE PROGRAM SAVING VETERANS FROM FORECLOSURE
If you’re in need of VA loan forgiveness, there are several forbearance options to explore, but when they all fail, many Veterans may feel discouraged. Fortunately, there’s the Veterans Affairs Servicing Purchase (VASP) program as yet another lifeline to help Vets avoid foreclosure so that they can keep their homes.
What Is the VASP Program?
If you're a Veteran or active-duty service member struggling with mortgage payments on a VA-backed loan, the VASP program may help you keep your home by allowing the VA to buy your modified loan from your lender.
By doing so, the terms of your loan are adjusted so that you receive more manageable payments.
This is a newer program, providing a lifeline where loan servicers have been submitting VASP applications since May 31, 2024, to provide even more financial security to heroes who may be going through a hard time.
VA Home Loan Foreclosure Forgiveness
VA loan forbearance repayment options are available if you’re having a hard time, including things like forbearance, repayment plans, or loan modifications to make your payments more manageable.
If your loan closed before January 1, 1990, and the VA has to repay your lender, you are responsible for reimbursing the government. However, you might qualify for a waiver if you can’t afford it, so always explore your options.
For those with VA loans closed on or after January 1, 1990, you won't have to repay the government unless it's found that fraud, misrepresentation, or bad faith is involved.
The VA’s Home Retention Waterfall provides multiple options to keep you in your home, but the VASP program steps in after all of these options fail.
For more help, call the VA at 877-827-3702 (option 4) or visit the VA home loans website to explore your options for keeping your home.
VASP Program Requirements
Not everyone can apply for the VASP program, and because applications aren’t through the VA, it’s important to understand what’s required.
Remember, you have to go through all of the other VA home loan foreclosure forgiveness options before the VASP program is even an option.
Should your servicer decide this last-resort option is right for you, they’ll submit your info to the VA. Here are the requirements your loan servicer will look at to determine whether or not the VASP program is right for you:
- Your VA loan is at least three months but no more than 60 months late when it’s being submitted to VASP.
- You, as the owner or an immediate family member, are living on the property.
- You and anyone else involved with the VA loan aren’t actively in bankruptcy when your loan is being submitted. Note: dismissed and discharged bankruptcies are acceptable.
- You are able to afford your mortgage again because whatever caused you to miss payments is now under control.
- Everyone on the loan can show proof of stable, reliable income.
- Your VA loan is the first lien position and without any additional other liens or judgments that would put this at risk.
- You’ve made at least 6 monthly payments towards your loan, which will include any modifications.
- You’re the legal owner of record on the property when entering the VASP program, and everyone on the loan agrees to its terms.
Special Forbearance Options
Perhaps you don’t meet the requirements to join the VASP, but the threat of being foreclosed upon is a concern.
Instead, your servicer may opt for a special forbearance or other options to help you stay afloat.
By using a special forbearance, you’ll receive a break for a set period of time from paying your mortgage, and afterward, your servicer can approve other options to help you cover payments.
Using such options is a temporary solution and allows your servicer to right the ship, including setting up the VASP for the future.
Some Congressmen Want to Cut the VASP Program
Despite the good that VASP provides, there are politicians who want to see it discontinued. A problem for many Veterans who have benefited from the lifeline as well as those who may do so in the future.
At least 15,000 homes have been saved from foreclosure for Vets, including the home of Kevin Conlon, who served in Iraq.
Together with his wife, Jenny, they used a VA loan to purchase their home; however, due to PTSD, the couple needed to lean on the VA's mortgage forbearance program.
But in 2022, this program ended, leaving families like the Conlons in a tough spot with financial problems only rising higher.
This is exactly why the VASP is so helpful, despite the perception set out by opponents, such as Rep. Derrick Van Orden (R-WI), who want to push for hard caps limiting the program’s reach.
If Rep. Orden’s proposal goes through, only 250 loans per year could benefit from VASP, which could cause many Veterans to face foreclosures due to a lack of support.
“You're talking about getting rid of something that would keep me and my family in a home that we love, that we need, and to do that to us is just – it's intentionally cruel,” said Kevin Conlon.
This is why Veterans are asking Congress to avoid such limitations so that more Vets can enjoy such protections for years to come.
While serving two combat tours with barely a break in between, Kevin Conlon would endure roadside bombs leaving him with traumatic brain injuries (TBIs), his best friend sacrificing himself while dying from a suicide bomber to the ground, and a litany of physical and mental issues that came with the aftermath.
For over a decade, thoughts of suicide and PTSD kept Conlon from living a full life, which is why he and his family leaned on VASP so that he could heal and get things back on track.
“That's why we needed it, so he could go inpatient at a Veterans program,” said Jenny Conlon.
It’s concerning that politicians, even a retired United States Navy SEAL Veteran, would propose limiting VASP for their own community.
In a time in which government cuts continue to affect the Veteran community, it’s important to stay informed about the VASP program, understand your options, and use your voice to advocate for the benefits Vets have rightfully earned.
Read next:
