NEED TO KNOW

• More than 10,000 veterans lost homes since VASP ended May 2025.
• Another 33,000 currently in active foreclosure proceedings nationwide.
• Replacement partial claim program still not fully operational as of April 2026.

WASHINGTON, DC (TDR) — More than 10,000 veterans have lost their homes to foreclosure since the Department of Veterans Affairs terminated its mortgage rescue program in May 2025, with another 33,000 currently in foreclosure proceedings.

The big picture: The Veterans Affairs Servicing Purchase program had saved 17,000 veterans from foreclosure during its 11-month run. The Trump administration shut it down on one week's notice without a replacement, and the statutory fix Congress passed in July 2025 still isn't fully operational.

Freedom-Loving Beachwear by Red Beach Nation - Save 10% With Code RVM10

• VASP launched May 2024, purchased delinquent loans, and modified them at a fixed 2.5% rate.
• The program ended May 1, 2025 after the VA issued a termination circular giving servicers eight days notice.
• The VA Home Loan Program Reform Act was signed July 30, 2025, but draft servicer rules remain in revision.

Why it matters: The gap between policy and human cost is now measurable in completed foreclosures.

• Roughly 75,000 VA borrowers are at least three months behind on payments, per ICE Mortgage Technology data cited by NPR.
• Veterans forced into high-rate loan modifications during the gap are excluded from the new partial claim relief.
• The replacement caps VA assistance at 25% of loan balance and requires veterans to resume original payments.

Driving the news: NPR's April 2026 investigation surfaced the completed-foreclosure count. The Urban Institute had flagged the 33,000-in-proceedings figure last summer.

CLICK HERE TO READ MORE FROM THE THE DUPREE REPORT

• VA officials did not respond to NPR's questions about why VASP was shut down without a replacement ready.
• The agency framed VASP as outside its mission, calling itself "not set up or intended to be a mortgage loan restructuring service."
• The Mortgage Bankers Association warned the House Committee on Veterans' Affairs in March 2025 that ending VASP would trigger foreclosures.

What they're saying:

• Elizabeth Balce, MBA Executive Vice President — "Foreclosure. Period. That's really where it's gonna come to."
• Bob Broeksmit, MBA President and CEO — "Halting the VASP program will increase the number of veterans facing foreclosure unless the VA and Congress implement a permanent partial claim option as soon as possible."
• VA Statement to NPR — "Beginning May 1, 2025, VA's VASP will stop accepting new enrollees."

Yes, but: VASP was never clean. It bought delinquent loans outright, modified them at below-market rates, and parked the loss on taxpayers. Republican concerns about strategic default were not invented out of thin air.

• VASP lacked explicit congressional authorization, a vulnerability the Biden-era VA never resolved.
• The Congressional Budget Office projects the replacement partial claim will save $147 million through 2035 versus the VASP model.
• Industry observers flagged VASP as fiscally unsustainable before the shutdown.

Between the lines: Both parties built a system where veterans depend on emergency authorities Congress never codified. The Biden VA ran VASP without statutory backing. The Trump VA killed it without a replacement. Congress then passed the fix unanimously, retroactively, meaning the policy was never contested, only the timing. The 10,000 completed foreclosures are the cost of using veterans as the variable while institutions resolved a jurisdictional question they could have answered in 2022.

What's next:

• VA is finalizing Chapter 22 servicer handbook revisions governing partial claim operations.
• Veterans already pushed into high-rate modifications have no relief mechanism under current statute.
• The partial claim authority sunsets in five years, meaning the cycle could repeat absent permanent reauthorization.

If foreclosure prevention for veterans matters to both parties, why does it keep collapsing between administrations instead of being permanent law?

Sources

This report was compiled using reporting from NPR, the Urban Institute, Military.com, the Center for Responsible Lending, and HousingWire

Freedom-Loving Beachwear by Red Beach Nation - Save 10% With Code RVM10