VASP through the VA is going to purchase
defaulted VA loans from mortgage servicers starting March 1 2024. Then the VA
will place them in the VA-owned portfolio as direct loans. Empower America to
work with Veterans experiencing severe financial hardship to adjust their loans
– and their monthly payments – so they can keep their homes.
Foreclosure and the
VA Servicing Purchase (VASP) Program: What Veterans Need to Know
Facing foreclosure can be a stressful
and overwhelming experience for any homeowner, but for veterans with
VA-guaranteed loans, there are options available to help them save their homes.
The Department of Veterans Affairs (VA) recently announced the VA Servicing
Purchase (VASP) program, specifically designed to assist veterans
struggling to make their mortgage payments and at risk of losing their homes.
What is the VASP program?
The VASP program allows the VA to
purchase defaulted VA-guaranteed loans from mortgage servicers. The VA
then modifies the loan terms, making them more affordable for the veteran, and
holds the loan in its own portfolio. This program provides veterans with a last
resort option if other traditional loss mitigation options haven't been
successful.
What happens to a veteran in
foreclosure under the VASP program?
If a veteran is facing foreclosure on
a VA-guaranteed loan, the following steps might occur:
1. Servicer Attempts
Other Solutions: Before resorting to foreclosure, the loan servicer is required to
explore other options with the veteran, such as forbearance, loan modification,
or repayment plans.
2. VASP as an Option: If other
solutions prove unsuccessful, the servicer may propose selling the loan to the
VA under the VASP program.
3. Loan Modification: If the VA
purchases the loan, they will work with the veteran to modify the loan terms,
typically by:
o
Reducing the interest rate
o
Extending the loan term
o
Forgiving a portion of the principal
4. Repayment Plan: The veteran
establishes a new repayment plan with the VA based on their current financial
situation.
5. Continued
Homeownership: If the veteran successfully fulfills the terms of the modified
loan, they can remain in their home.
Important Points for Veterans:
- VASP is not yet available: While the program was
announced in November 2023, it is not expected to launch until
March 2024.
- Not every veteran qualifies: The VASP program is
intended for veterans facing imminent foreclosure and who
have exhausted other options.
- Seek help early: Veterans facing difficulty making their
mortgage payments should immediately contact their loan servicer to
discuss available options, including forbearance, loan modification, and
the VASP program when it becomes available.
What will happen to Veterans who
agreed to sub-to, wrap around, creative sales programs for investors? What will
happen to veterans who were in foreclosure in 2023-2024 before this program?
Veterans income that can make sense to
stay. I’m hoping financial arrears are tacked on to the end of the thirty
years, create forty-year loans, waive servicing legal and late fees, find
uniformity in hazard insurance policies, and forgive without 1099 to the vet.
Local property tax assessor offices, state revenue offices, and the IRS need to
join hands and forgive and reduce fees and taxes to veterans in trouble. What
say you?
HERE ARE THE PUBLIC COMMENTS TO THE PROGRAM:
