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On April 3, 2025, the U.S. Department of Veterans Affairs (VA) announced it will end the Veterans Affairs Servicing Purchase (VASP) program on May 1, 2025. This decision comes just shy of one year since the program’s inception. The VASP program was originally implemented as a rescue program to help veterans and their families after tens of thousands of veterans faced foreclosure due to the COVID-19 mortgage forbearance program ending.

After the VA abruptly ended its key pandemic-era mortgage relief program, which allowed veterans who were experiencing financial hardship to defer payments, around 40,000 veterans were left facing foreclosure. In response, the VA halted foreclosures for a full year while it worked to roll out the VASP program, which began accepting submissions May 31, 2024. According to the VA, the VASP program has been able to help over 17,000 veterans and their families obtain new, low-interest-rate, affordable mortgages and avoid foreclosure.   

Despite the success of the program, the VA has declared that it is necessary to end the VASP program as the VA is not intended to be a loan restructuring service. However, veterans’ advocacy groups, housing advocates, and even mortgage company executives have all cautioned against ending the program. Although the program initially caused uncertainty among the mortgage industry, as advocates sought a permanent partial claims program to assist veterans facing hardship, industry executives believe ending VASP is not the solution at this time.

Industry groups, such as the Mortgage Bankers Association (MBA), argue that ending the VASP program will have an immediate and harmful impact on veterans. Elizabeth Balce recently testified before the House Committee on Veterans Affairs, on behalf of the MBA, to warn lawmakers of the severe risk associated with ending the program. Balce, who also serves as the executive vice president of Servicing at Carrington Mortgage Services, says despite problems with its initial implementation, “[w]ithout VASP, [the] VA would have foreclosed on tens of thousands of veterans” in the last year.

On April 3, 2025, following the VA’s announcement, Bob Broeksmit, president and CEO of the MBA, released a statement on VASP’s termination, urging the VA to immediately look into alternative loss mitigation options to help veterans. Broeksmit stated, “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.” As of now, the VA has not announced plans for a program to replace VASP.

Bradley’s Banking and Financial Services team will continue to monitor the impacts of the VASP program ending to answer questions and assist industry participants in meeting their compliance requirements.

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Photo of Christy W. Hancock Christy W. Hancock

Christy Hancock’s practice is dedicated to financial services regulatory compliance and litigation. Her work with mortgage servicing and financial institution clients has given her a broad base of knowledge regarding laws affecting the mortgage servicing business, including bankruptcy and foreclosure best practices, payment…

Christy Hancock’s practice is dedicated to financial services regulatory compliance and litigation. Her work with mortgage servicing and financial institution clients has given her a broad base of knowledge regarding laws affecting the mortgage servicing business, including bankruptcy and foreclosure best practices, payment application, correspondence requirements, allowable fees, loan modifications, escrow requirements, and property preservation. In recent years, the majority of her practice has focused on advising large financial institutions on bankruptcy-related regulatory matters and large-scale remediation projects.

Photo of Jason R. Bushby Jason R. Bushby

Jason Bushby provides regulatory compliance, examination, enforcement, and litigation assistance to a range of financial services clients across the country. He serves as counsel to the American Bankers Association and general counsel to the Alabama Consumer Finance Association. He is also a frequent…

Jason Bushby provides regulatory compliance, examination, enforcement, and litigation assistance to a range of financial services clients across the country. He serves as counsel to the American Bankers Association and general counsel to the Alabama Consumer Finance Association. He is also a frequent speaker during webinars and trade association presentations on regulatory compliance issues.

Photo of Robin-Renee Keys Robin-Renee Keys

Robin-Renee Keys is an associate in Bradley’s Banking and Financial Services Practice Group. Robin-Renee’s practice is focused on helping financial services clients navigate the regulatory and compliance issues most critical to their business. Robin-Renee’s compliance experience encompasses issues arising under the Fair Credit…

Robin-Renee Keys is an associate in Bradley’s Banking and Financial Services Practice Group. Robin-Renee’s practice is focused on helping financial services clients navigate the regulatory and compliance issues most critical to their business. Robin-Renee’s compliance experience encompasses issues arising under the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), Truth in Lending Act (TILA), and the Real Estate Settlement Procedures Act (RESPA), including the many regulations interpreting those statutes. She analyzes and advises on regulations issued by the Department of Housing and Urban Development (HUD), Office of the Comptroller of the Currency (OCC), the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), and other regulatory bodies.