When Jim Nabors, president of the National Association of Mortgage Brokers (NAMB), headed to Capitol Hill last week to meet with lawmakers, it was to discuss a bill that aims to prevent abusive spam calls to homebuyers.
But when he was presented with the opportunity to advocate for the passage of the VA Home Loan Program Reform Act, he jumped at the chance.
“It’s just a win for the veterans and it’s still a win for the government,” Nabors told Scotsman Guide regarding the bill that would establish a loan default management program for veterans in danger of losing their homes to foreclosure.
The proposed bill, sponsored by Rep. Derrick Van Orden, R-Wis., would create a program to replace the Veterans Affairs Servicing Purchase (VASP) Program. That U.S. Department of Veterans Affairs mortgage program was abruptly ended on April 30, leaving many veterans who were late on their mortgage payments without recourse.
The VASP program, which was established in May 2024, was seen as a last-resort option for veterans experiencing severe financial hardship who were delinquent on mortgage payments. Under the program, the VA purchased delinquent loans and modified the terms to make it easier for veterans to repay what they owed.
Van Orden and other House Republicans had criticized the VASP program. In a statement released on April 3, Van Orden said costs ballooned under the program and raised “significant concerns” among GOP members of Congress, “especially when a partial claim program could solve most delinquent loans at a much less expensive clip to the taxpayer.”
According to Nabors, the “partial claim” component of the proposed replacement program means that the delinquent portion of the loan would be moved to the back end of the loan term and would be interest-free, with the remaining balance subject to the loan’s current interest rate.
In a May 8 letter to Rep. Mike Bost, R-Ill., who chairs the House Committee on Veterans’ Affairs, Nabors noted that as of April 1, “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.” Nabors added in the letter that the proposed legislation “includes the ability to implement measures that can prevent foreclosure and assist veterans in retaining their homes.”
The Mortgage Bankers Association (MBA) also sent a letter to Bost and other ranking Committee on Veterans’ Affairs members last week advocating for passage of the bill.
“Without swift legislative action and subsequent VA implementation, thousands of veteran homeowners recovering from temporary financial hardship could face heightened foreclosure risk due to the absence of a sustainable and scalable loss mitigation option,” wrote Bill Killmer, MBA’s senior vice president of legislative and political affairs. “We should not repeat the mistakes of the past when a viable VA loss mitigation option was terminated without a replacement, unfairly stranding veterans without the options available to all other government supported borrowers.”
Nabors said in an interview that lawmakers met last week and hashed out details of the legislation. He said that under the current proposal, veterans who are late on loan payments would be given five years to pay it up. He added that it improves upon VASP by increasing the amount of unpaid loan principal that can be included in the program from 25% to 30%.
The NAMB president said there is bipartisan support for the legislation that would assist veterans experiencing short-term hardships.
“They shouldn’t lose their house because they were out of work for three months,” Nabors said. “These are our veterans. They put their lives on the line for you and I. We owe them.”
