VA PROGRAM FOR STRUGGLING VETERANS ENDS — Here’s What That Could Mean for Your Home and Credit
The VA’s VASP program has ended, leaving many veterans at risk of foreclosure or credit damage
Learn what your legal options are and how R23 Law’s California Consumer Protection Attorneys can fight for your housing and credit rights.
Veterans Lose a Key Safety Net as VA Ends Loan Purchase Program
As of May 2025, the U.S. Department of Veterans Affairs (VA) has officially stopped accepting new applications for its VA Servicing Purchase (VASP) program—a last-resort option that helped thousands of veterans avoid foreclosure by buying back delinquent VA loans and offering manageable repayment terms.
With no immediate replacement in place, many veteran homeowners are now left vulnerable—especially those facing financial hardship, missed payments, or pending foreclosure.
What Was the VA Servicing Purchase (VASP) Program?
VASP was created to assist veterans who had fallen behind on VA-backed mortgage payments due to life events like job loss, illness, or rising interest rates. Through the program, the VA could purchase the loan from a private servicer and offer the borrower new repayment terms directly.
By early 2025, over 17,000 veterans were enrolled in the program.
Why Did the VA Shut It Down?
The VA cited:
Operational challenges
Lack of cooperation from mortgage servicers
Plans to launch a new initiative in the future
But for now, that leaves tens of thousands of borrowers in limbo, with no clear path to affordable repayment or foreclosure relief.
How This Affects Veteran Borrowers
Without VASP, veterans may now face:
Loan modifications that don’t offer meaningful relief
Heightened risk of foreclosure
Credit score damage from reported delinquencies
Deceptive mortgage servicing practices—such as misreporting or rejecting modification agreements
And because many veterans are unaware of their rights, they may not know they can fight back.
Check Your Credit Reports Carefully
Servicers are legally required to report accurate information. But in the wake of the VASP closure, errors like:
Missed payments that weren’t actually missed
Failure to report approved modifications
False foreclosure entries
...can severely damage your credit and future loan eligibility. If these aren’t corrected after a formal dispute, you may be entitled to damages under the Fair Credit Reporting Act (FCRA).
Protections for Active-Duty Military
If you’re still on active duty or recently transitioned out, you may be covered by the Servicemembers Civil Relief Act (SCRA), which offers:
A 6% interest cap on certain obligations
Protection from default judgments
Limits on foreclosure or eviction proceedings
Mortgage servicers are legally required to honor these rights. If they don’t, you can take legal action.
R23 Law Stands With California Veterans
If your loan servicer has:
Mishandled your loan modification
Reported inaccurate mortgage data to credit bureaus
Violated your rights under the FCRA or SCRA
Threatened or initiated wrongful foreclosure
You may have strong legal claims—and R23 Law’s California Consumer Protection Attorneys can help you pursue them.
📞 Free Case Review for Veterans and Servicemembers
Our attorneys represent veterans, active-duty service members, and their families in cases involving:
Mortgage servicing abuse
Credit reporting violations
Foreclosure defense
SCRA and FCRA litigation
You served your country—now let us serve you. Contact R23 Law today to protect your home, your credit, and your future.
