Trump's VA strands thousands of veterans by ending a key mortgage program
Link to Full Article (https://www.npr.org/2025/05/01/nx-s1-5382448/va-veterans-affairs-mortgages-foreclosure-vasp)
NPR - Chris Arnold, Quil Lawrence
May 1, 20255:00 AM ET
The U.S. Department of Veterans Affairs, as of Thursday, has ended a new mortgage-rescue program that so far has helped about 20,000 veterans avoid foreclosure and keep their homes.
The move leaves millions of military veterans with far worse options than most other American homeowners if they run into trouble paying their home loans. And it comes at a time when nearly 90,000 VA loans are seriously past due, with 33,000 of those already in the foreclosure process, according to the data and analytics firm ICE.
For their part, veterans interviewed by NPR feel like the VA has now repeatedly stranded them by first offering them a lifeline and then cutting the rope once they grabbed hold.
At issue is the VA Servicing Purchase program, or VASP. It was put in place during the Biden administration after missteps by the VA left homeowners with no affordable way to catch up on their VA-backed home loans if they fell behind. VASP rolls the homeowners' missed payments into a new, low-interest rate loan that the VA then owns outright. With today's higher mortgage rates of around 7%, it is often the only affordable option for homeowners with VA loans.
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What has caused so many veterans to get behind in the loan payments?
Helping to eliminate those causes seems to be a reasonable course of action without or without this rescue program.
I hope they can keep their homes.
A VA loan is a normal mortgage. So, what ever caused the home owner to be in arrears is the greater issue. Seemingly, 90k vets in mortgage trouble is on par with the grab bag of troubles vets have.
The VA home loan program simply allows a vet to buy with no money down, but usually with a point or more higher interest. Make no mistake, these loans net their mortgage holders superior returns since the VA guarantees that the lender gets their money and does nothing to help the vet retain a home. Rents are no better.
Significant contributor and exacerbator is the sheer cost of a home, even a very modest one. Early 2025, the median home sales price is $416,900 and the average home sales price is $503,800. Wages on the other hand, "In their first year after service, Army veterans who were operational intelligence specialists typically had average earnings of $55,000 while former infantry veterans average earnings were $33,000. Veterans of the Navy, Marines and Air Force experienced similar gaps in initial median earnings in their first year after service."
With a $400K house mortgage payment between USD $2800 and $3400. No wonder! Older vets who were able to bank on the lower interest from the last 8 years or so have correspondingly lower payments, but the pandemic coupled with economic hardships common in the Millennials and Gen Zers highlights that its not just the vets but the rest of our younger folks suffering in spite of the extra baggage hauled by most vets.
My cousin Brenda, a late Cold War era vet (electronics and radar tech), never had a good enough paying job to buy a house in the first place even 20 years after leaving the service. Throw in the turmoil of survival through the homophobic 80's, 90's and finally transitioning MTF in the late 2000s, what do we expect?
!
Some things have become expensive.
Supply vs. Demand.
There are many corporations buying houses and renting them. That is likely not good for many neighborhoods because often renters do not take as good care of properties as owners living in those properties. Then some landlords do not take care of the properties well either.
When the properties decline, values decline, and non renting homeowners in the area lose out too. Hence some municipalities are working toward limiting how many houses in some areas can be rented. I wonder if that prompts lawsuits by those who wish to buy then rent those properties.
Chrissy