A preventable crisis · years in the making, across two administrations.
The veteran foreclosure crisis
This is a multi-administration federal failure, several years, several programs, two administrations, each turn trapping a different group of families in a different way. Which families were harmed, and how, depends on when they fell into the foreclosure pipeline and why. The chain of events created distinct cohorts, each owed a different remedy.
| When | What happened | Who it traps |
|---|---|---|
| 2020 | CARES Act forbearance: veterans told to pause payments; the designed exit was the COVID partial claim. | , |
| Oct 2022 | VA terminates the COVID partial claim mid-forbearance; families are offered only high-rate modifications. | Cohort A: forbearance families |
| May 2024 | VASP launches as the replacement rescue, with a foreclosure moratorium during rollout. | , |
| May 2025 | VASP killed on eight days’ notice (Circular 26-25-2); families not yet entered are sent to foreclosure. | Cohort B: VASP-gap families |
| Jul 30, 2025 | Congress restores a permanent partial claim and directed waterfall, H.R. 1815, bipartisan. | , |
| Jun 15, 2026 | VA launches the Partial Claim eleven months after enactment, official, but not operational. | , |
| Nov 28, 2026 | Servicer implementation deadline. Until a servicer stands it up, and the VA-added gates exclude the already-harmed. There is no help. | Cohort C: excluded / waiting |
For today’s cohort, why “available” still means trapped.
15,000+
already foreclosed on or displaced
90,000+
behind or in the foreclosure process
160,000+
impacted in total, and climbing
Problem 1. The gates Congress never wrote.
Congress granted the partial-claim authority and a directed waterfall to help these families. The VA’s June 2026 rollout (Manual M26-4, Ch. 22) then excluded the already-harmed, families foreclosed on or evicted, and those pressured into high-rate modifications, short sales, or deeds in lieu. The gates that do this, active-default, current-servicer, a three-month trial, are administrative choices the VA added, not statute. It can remove them without new legislation, and the Secretary’s Section 3(h) authority remains unused.
Problem 2, launched is not available
By the VA’s own guidance, servicers have until November 28, 2026 to implement the program. Until a given servicer does, a veteran there can still be foreclosed on rather than helped. No foreclosure pause accompanied the launch. For a family with a sale date, “available” is the only word that matters, and for most it is not yet true anywhere.
The fiscal point that should end the debate.
Foreclosure is the most expensive outcome for the government. One VA foreclosure loss runs ~$72,000–$74,000 (NCLC / CRL), and the VA takes roughly 75% of foreclosed homes into its own REO inventory. The permanent partial claim, by contrast, was scored as $147 million in net savings over ten years (CBO; H. Rept. 119-104), with $294 million in avoided foreclosure-related payments. Preventing foreclosures saves money; permitting them spends it.
What we ask
1. Pause foreclosures & evictions
Halt VA-guaranteed foreclosures and the evictions the VA files as plaintiff until the Partial Claim is operational at the veteran’s own servicer.
2. Remove the gates & identify the harmed.
Strike the VA-added eligibility gates in M26-4 Ch. 22, use the unused Section 3(h) authority, and issue immediate guidance, with updated foreclosure data and oversight, to identify families foreclosed on who should have received prevention.
3. Rehouse & make whole
Coordinate rapid rehousing and restorative options for families’ loss of home, equity, and stability, case management, not a referral hotline.