The National Consumer Law Center criticized the VA for allowing the Veterans Affairs Servicing Purchase program to lapse without a sufficient replacement. The program, which previously included a temporary foreclosure moratorium, ended on May 1. 

NCLC was joined by the National Fair Housing Alliance and Reps. Mark Takano, D-Calif. and Chris Pappas, D-NH, in calling for its reinstatement at a press conference on Tuesday. Both Democrats serve on the House Committee on Veterans Affairs. 

VASP helped keep 40,000 borrowers from losing their homes and now leaves scores more vulnerable to foreclosure, according to NCLC. 

"The VA Home Loan Program is a benefit that Veterans have earned through service and sacrifice to give them housing stability," said Alys Cohen, senior attorney at the center, at the event. 

"The termination of VASP results in veteran borrowers having substantially worse options than other borrowers with federally backed mortgage loans. As a result, veterans with VA mortgages will face preventable foreclosures," she claimed. 

VASP initially included a temporary servicing foreclosure moratorium after the program's introduction. Following the end of the moratorium in late 2024, foreclosure filings on VA mortgages saw a significant spike in the first half of this year.  

While supporting a VASP successor partial claims bill, which passed in the House of Representatives one day before NCLC made its announcement, Cohen said the new VA Home Loan Reform Act would not be adequate to fully assist service members.

"We are committed to working with Congress on establishing a new hardship program," said Cohen. "But simply cancelling VASP without a replacement will throw tens of thousands of veterans out of their homes." 

Lending mortgage trade groups had previously raised warnings about the expiration of VASP, but also put forth firm statements of support for quick enactment of the new bill. In a letter to the House Committee on Veterans Affairs earlier this month, the National Association of Mortgage Brokers underscored the urgency of the situation for many borrowers.

"There were more than 75,000 delinquent VA borrowers who had missed three or more payments on their mortgages, which means we could now face a serious financial and homelessness problem," NAMB President James Nabors wrote. 

The proposed legislation would encourage housing stability "by empowering the VA to take proactive steps in default situations," Nabors said.

Diverging from NCLC's remarks, the Mortgage Bankers Association pointed to similarities in the newly passed bill when compared to other government-backed relief measures as it advocated for its approval in the Senate. 

"We applaud the passage of this important bill, which gives the VA permanent authority to create a partial claims program that aligns with the loss-mitigation options offered to borrowers across other federal housing agencies," MBA President and CEO Bob Broeksmit said in a statement. 

MBA said it would work with lawmakers to get the legislation passed as quickly as possible. "Thousands of struggling veteran homeowners risk foreclosure without this swift legislative action and subsequent implementation," Broeksmit added.