“The VA should also develop a permanent partial claim option as its preferred home retention solution, in addition to VASP,” he added. “The partial claim worked successfully for borrowers and servicers during the pandemic and is a crucial loss mitigation tool that exists for every other government loan program. Having both a partial claim option and VASP would provide servicers a durable loss mitigation framework to help struggling homeowners avoid foreclosure in any market environment.”
The VA said it would give servicers additional time to implement the complex VASP program beyond the effective date of May 31.
“The VA has designed a program that will be broadly available and provide relief that many VA borrowers need, especially in the current high-interest rate environment,” said Kanav Bhagat, consultant to the Center for Responsible Lending. “We believe the program will provide tens of thousands of active-duty servicemembers and Veterans with the assistance they have earned through their service, allow them to remain in their homes, and avoid foreclosures.”
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