Implementation gaps, borrower harm and proposed remedies

BEFORE THE ROUNDTABLE

What was already on the record

Several findings discussed on September 16 were already documented, some of them months earlier. This report treats the roundtable as corroboration of that earlier record, not as its origin. Each item links to where VFC already carries it.

• VA’s existing authority to purchase a guaranteed loan to prevent foreclosure, and the argument that it was going unused.
• The gap between VA’s loss-mitigation options and those available to FHA, Fannie Mae and Freddie Mac borrowers.
• Borrowers pushed toward modifications that raised their monthly payment.
• The interaction between a modification taken during the gap and later Partial Claim eligibility.
• The absence of any public, servicer-by-servicer record of which companies had implemented the program.

EARLIER PUBLIC WARNINGS

What experts told Congress and VA before the launch

March 26, 2026. In written testimony to the House Veterans’ Affairs Subcommittee on Economic Opportunity, the National Consumer Law Center set out the payment-increase problem in the draft loss-mitigation waterfall, and made the point that a Partial Claim taken later does not restore a borrower’s pre-hardship payment once a modification has raised it.

June 15, 2026. On the day the program became available, NCLC called on VA to direct servicers not to proceed with foreclosures until a servicer’s own Partial Claim program was operational, and not to offer payment-increase modifications to borrowers who would be eligible for a Partial Claim.

Both points recurred on September 16. The second is the one the servicers’ own trade association addressed directly.

SEPTEMBER 16 UPDATE

Servicer implementation

Housing Policy Council representative Matt Douglas said three of the five largest servicers had deployed the partial-claim program (00:54:20). He did not identify them in this passage. This is a dated, attributed implementation update; it does not identify whether an individual borrower’s servicer was ready.

SEPTEMBER 16 UPDATE

Servicers had verbal answers that borrowers could not find in public guidance

Matt Douglas said Housing Policy Council members submitted 70 implementation questions and received ten answers in writing (00:56:36). He also credited VA staff with answering virtually every question verbally. His concern was the gap between those responses and written guidance available to borrowers and servicers.

Douglas described the interim direction to servicers that had not implemented the program as continuing the existing process, including market-rate modifications (00:55:46). He said the answer to that question was not on VA’s website.

SEPTEMBER 16 UPDATE

Current on the loan, paying more each month

NCLC’s Steve Sharpe described borrowers who were current on their mortgages after modifications that substantially increased their payments (00:50:42). A current payment status does not tell readers whether a household has returned to its earlier payment level.

ATTRIBUTED ESTIMATES

The figures participants gave, and what each one measures

These describe different populations and periods. They are listed separately for that reason, and must never be added together.

PRIMARY SOURCE

What VA’s own financial report says

VA’s FY2025 Agency Financial Report, Note 7 (printed pages 48, 50 and 52), identifies 38 U.S.C. §§ 3732 and 3720 as the existing authorities used to launch VASP. It reports $10.0 billion in VASP loan acquisitions during FY2025 and a $2.1 billion modification subsidy cost associated with terminating the program.

RESEARCH CONTEXT

Published research on home-retention savings

The Housing Policy Council’s published research summaries describe estimated savings from FHA and GSE home-retention programs after accounting for self-cures and redefaults. These are analyses of FHA and GSE programs; VFC is not presenting their savings as measured VA results, and no VA redefault rate is established by them.

PROPOSALS MADE DURING THE SESSION

All twenty remedies discussed

Every remedy raised is listed, whether or not VFC has previously asked for it. These are participants’ proposals: listing one is not a VFC endorsement. The authority lines record what a speaker said, not an independently established legal position.

WHAT THE SESSION LEFT OPEN

Sixteen questions, and where each one stands

These are not all unanswered, and none should be read as fully closed. Of the sixteen, 7 are unresolved and the rest are partly answered, attributed, deferred or otherwise still open in part. Each carries its own state and its own remaining gap.

WHERE PARTICIPANTS DIFFERED

Disagreement, and remedies left unresolved

Jeff Wilson questioned the partial claim’s long-term effect, arguing that it defers a loss rather than avoiding it (01:21:54). He also argued that historical foreclosure comparisons mattered, giving figures for earlier decades and noting that servicers were restricted from foreclosing for much of 2024 (00:41:34). Other participants supported expanding loss-mitigation options.

VFC carries Wilson’s historical account as his attributed account. VFC has not located a public VA foreclosure series against which those figures could be reproduced, which is itself part of the data problem described above. That is a limit on independent replication, not a finding that the figures are wrong.

Participants also raised the needs of families already harmed, in the closing discussion (01:29:06 and 01:33:35). Acknowledging those families is different from specifying how families who have already lost their homes would receive relief. In the passages VFC reviewed, no such mechanism was identified.