The Senate passed the VA Home Loan Program Reform Act, sending much-needed relief for struggling Veterans to the President’s desk.
The legislation establishes a partial claim program, moving homeowners’ missed payments to the end of their loan terms while allowing them to keep the same monthly payments.
The new legislation aims to replace the popular VA Servicing Purchase (VASP) program, which expired earlier this year.
VASP allowed the VA to purchase defaulted loans and offer low-interest rates for struggling servicemembers. It stopped taking new applications in May, around the same time that the VA’s foreclosure moratorium ended, to bipartisan chagrin.
Republican Sen. Bill Cassidy of Louisiana said the move left veterans “in the lurch” at a Senate committee hearing that month.
The Mortgage Bankers Association (MBA) backed the new bill.
“Veterans were just about the only type of mortgage borrower in this country that did not have this loss mitigation option… it’s a proven method that will help thousands of veterans,” MBA President and CEO Bob Broeksmit told NPR.
It is unclear how quickly the VA will be able to address the immediate needs of Veterans teetering towards foreclosure, but its press secretary, Pete Kasperowicz, said it will implement changes as soon as Trump signs the act into law.
This bipartisan legislation also makes permanent the VA’s temporary policy allowing veterans to directly compensate their real estate agents, ensuring they can participate in the housing market on equal footing with other homebuyers, leaders at the National Association of Realtors said.
“We are grateful to the House of Representatives and the Senate for passing this measure and providing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market,” Shannon McGahn, NAR executive vice president and chief advocacy officer, said in a press release.
