Representatives of the Mortgage Bankers Association (MBA) and the Housing Policy Council (HPC) are urging leaders at the U.S. Department of Veterans Affairs (VA) to delay a mandatory compliance date with the agency’s Veteran Affairs Servicing Purchase (VASP) program, which aims to prevent foreclosures against military personnel who experienced financial hardship due to the ongoing economic consequences of the COVID-19 pandemic.
The letter is addressed to John Bell, executive director of the VA’s Loan Guaranty Service, and Josh Jacobs, undersecretary for benefits at the VA’s Veterans Benefits Administration.
Previous statements noted that the program would be available to 40,000 U.S. veterans beginning on May 31, but MBA and HPC are requesting the mandatory compliance date be pushed out past Oct. 1 due to concerns that servicers need more time to become compliant with the program.
“[B]ased on the number of key operational questions that are outstanding, we have significant questions about whether the VA or any servicer will be ready to deploy VASP until much later than that date,” the joint letter stated.
The organizations make two key requests. The first is that the expectations of veterans should be clearly set by “publicly communicating that servicers and the VA are working diligently to quickly adjust their existing operations to support the new program before the mandatory compliance deadline, which we think should be re-set, based on the guidance publication date,” the letter stated.
Servicers will aim to implement VASP as soon as possible, but “servicers must have until a date certain, preferably six months from the final publication of the VASP guidance, to execute the new program, which also includes a new loss mitigation waterfall,” according to the letter. “It is not fair to Veterans or servicers to create a public expectation that VASP will be available before May 31, 2024.”
Second, pushing the mandatory obligation date beyond Oct. 1 would allow the involved parties to adjust to the program’s requirements.
“Considering the guidance that remains outstanding and in light of the time it will take the VA and servicers to effectively implement VASP, we support an extension of the voluntary foreclosure moratorium to align with the effective date of VASP for eligible borrowers,” the letter explained.
Both organizations “welcome” the VASP program, they said, but there has not been enough guidance about how to implement it.
“Mortgage servicers are committed to the successful launch and long-term viability of the VASP program and realize its potential to help struggling Veterans,” the letter read. “Achieving these goals and setting up an effective VASP program will require all stakeholders to execute a complex loss mitigation and servicing transfer process. We are concerned with the lack of information and guidance on how to do so.”
