The Department of Veterans Affairs announced today that it will launch a new program in May to help more than 40,000 veterans experiencing severe financial hardship avoid foreclosure and stay in their homes.
The Veterans Affairs Servicing Purchase, or VASP, program will be a “last-resort” tool in the VA’s suite of home retention options for eligible veterans, active-duty service members and surviving spouses with VA-guaranteed home loans, the agency said. Through the program, the VA will purchase defaulted VA loans from mortgage servicers, modify the loans and then place them in the VA-owned portfolio as direct loans. This will empower the VA to work directly with eligible veterans to adjust their loans—and their monthly payments—so they can keep their homes. With VASP, borrowers will have a fixed 2.5% interest rate.
Veterans will not apply directly for VASP. Instead, beginning May 31, mortgage servicers will identify qualified borrowers and submit requests on behalf of veterans based on a review of all home retention options available and qualifying criteria. Veterans facing financial hardship should work with their mortgage servicers to explore available options, the VA said.
