The Number the VA Does Not Say Out Loud

The Department of Veterans Affairs issued Circular 26-25-2 on April 23, 2025. The document is one page. Its subject line reads, in full: "Veterans Affairs Servicing Purchase (VASP) Program Wind Down." The circular states that as of May 1, 2025, the VA rescinds the VA Home Retention Waterfall and will stop accepting VASP submissions. It allows active Trial Payment Plans to continue through August 31, 2025. It does not say how many veterans were enrolled. It does not say how many would face foreclosure as a result. It does not say what, if anything, would replace the program. The phrase "loss ratio" does not appear. The phrase "veteran outcome" does not appear. The phrase "foreclosure prevention" does not appear. The circular is the entire public record of a policy decision that, according to ICE Mortgage Technology data, has since driven more than 10,000 veterans out of their homes.^[1]

The numbers behind that silence are now visible. As of the most recent industry count, approximately 90,000 veterans are currently behind on their mortgages or in the foreclosure process.^[1] That pipeline did not exist in a vacuum. It was built by a sequence of administrative actions, each of which the VA documented tersely and none of which the VA's own circulars fully explain.

The Forbearance Trap

The chain of events began during the COVID-19 pandemic, when the VA's forbearance program allowed veterans to pause mortgage payments. The program functioned as designed: veterans who lost income could skip payments without immediate consequence. The Biden administration shut down the forbearance framework in October 2022 without first establishing a mechanism for veterans to bring their loans current without facing a lump-sum repayment demand. Tens of thousands of veterans, including the Ledford family, were told they owed the deferred amounts immediately or faced foreclosure.^[1]

The Ledfords are a Marine veteran's family. Leann Ledford's husband was injured in Afghanistan; he developed PTSD and a traumatic brain injury that prevented him from working. The couple waited six months in a trailer while his VA disability paperwork moved through the system. They bought a house in January 2021 using a VA-backed loan. By 2022, after costly home repairs forced them to seek mortgage forbearance from Freedom Mortgage, they were caught in the debt trap the moment the Biden administration ended the deferral program.^[1]

After NPR reported in late 2023 that 40,000 veterans had been left with no affordable path to bring their loans current, the VA halted foreclosures nationwide for one year while it developed what became the VASP program.^[1] The VASP program launched on May 31, 2024. It was the final step in the VA Home Retention Waterfall, designed specifically for a high-interest-rate environment where veterans could not afford to refinance at prevailing rates. VASP offered qualifying veterans a new mortgage at a reduced interest rate, allowing them to bring their loans current without a lump-sum payment.^[2]

The Warning Nobody Took

The mortgage industry warned what would happen if VASP were killed without a replacement. Elizabeth Balce, speaking for the Mortgage Bankers Association at a March 2025 House Committee on Veterans' Affairs hearing, said: "Foreclosure. Period. That's really where it's gonna come to."^[1] Steve Sharpe, an attorney with the National Consumer Law Center, told the same hearing the VA should have protections in place to prevent veterans from losing their homes.^[1] Both warnings are in the congressional record. Neither appears in any VA circular.

Less than two months after those warnings, the Trump administration shut down VASP anyway. The VA gave mortgage servicers and its own staff one week's notice.^[1] Veterans already enrolled in Trial Payment Plans were allowed to continue through August 31, 2025. Veterans who had not yet enrolled, including the Ledfords, were not permitted to enter the program.^[2]

The VA did not publish a cost-benefit analysis. The VA did not publish a veteran impact statement. The VA did not explain what would replace VASP or when. Circular 26-25-2, the single page documenting the wind-down, does not contain the words "new program," "replacement," or "future assistance."^[2]

The Dollar Gap Nobody Names

The trade-off the VA did not publish is arithmetic. VASP offered qualifying veterans a new mortgage at a reduced interest rate, allowing them to bring their loans current without a lump-sum payment. The program's cost to the VA was the difference between the market rate and the concessioned rate, absorbed as a loan guaranty loss. The MBA's Balce framed the concern in terms of program cost. Congress had cited costs as the reason to kill VASP. What the congressional record does not contain is a comparable figure for what the alternative costs: the socialized loss from foreclosure, the VA-guaranteed property disposition, the housing instability imposed on veterans who served in Afghanistan and Iraq and are now being evicted from homes the VA loan program helped them buy.^[1]

A 2003 GAO report examined a prior VA decision to terminate a loan program, the Vendee Loan Program, which had allowed the VA to finance the sale of foreclosed properties. The GAO concluded the VA memorandum terminating that program was exempt from Congressional Review Act submission requirements because it related to "agency management." 38 U.S.C. 3733 authorized the Vendee Loan Program. The VA's position was that vendee financing extended the government's liability for 30 years and that without the program, the VA would have cash sales and would not be in competition with private lenders.^[4] The GAO's analysis does not contain the words "veteran homelessness." It does not contain the words "housing stability." It does not contain the words "servicemember family."^[4]

The silence on cost runs in both directions. Industry testimony cites program expense as the reason to end VASP. Consumer advocates cite foreclosure expense as the reason to preserve it. Neither side quantifies the full socialized cost: the VA-guaranteed loss on the foreclosed property, the cost of re-housing the veteran family, the administrative burden of the foreclosure process, the impact on the veteran's credit and future borrowing capacity. The dollar gap between VASP's cost and foreclosure's cost is never named in a single document the public can read.

The 90,000 in the Pipeline

The VA has since said it is developing a new program that could help many of the approximately 90,000 veterans currently behind on their mortgages or in the foreclosure process.^[1] The agency has not published a launch date. The agency has not published eligibility criteria. The agency has not published interest rates or subsidy levels. Circulars issued after April 23, 2025 address Connecticut appraisal ordering, FHFA conforming loan limits, builder identification numbers, and bills of collection on reconveyances.^[2] None of them address the replacement program for the veterans still in the foreclosure pipeline.

Housing advocates warn that when the new program is operational, it could still leave veterans with worse options than other homeowners and push monthly payments up by hundreds of dollars.^[1] That warning is in the trade press. It is not in any VA circular.

What This Means for You

The VA loan is the most protective mortgage product available to American homebuyers. It requires no down payment, carries competitive interest rates, and limits closing costs. For nearly a year now, that protection has had a gap: a specific loss-mitigation pathway that existed under VASP no longer exists, and the replacement has not been named, dated, or costed in any public document. The 90,000 veterans currently in the foreclosure pipeline are not there because they chose to default. Many of them are there because the VA changed the rules while they were enrolled in a program the VA told them to use.

The structural tension is this: the VA loan program is designed to help veterans achieve homeownership, but the program's loss-mitigation infrastructure depends on administrative actions the VA can terminate by issuing a circular. Other federal loan programs (FHA, USDA) have statutory loss-mitigation timelines and mandatory servicing standards. The VA's waterfall was administrative. When the waterfall ended, the safety net ended with it. No congressional vote, no rulemaking comment period, no public disclosure requirement applied.

The veterans losing homes are not losing them because they cannot afford the house they bought. They are losing them because the VA ended a program they were using to stay current, gave one week's notice, and has not yet replaced it with anything published in the Federal Register or the VA's own circular library.

What You Can Do This Week

Ask your servicer to show you the waterfall. Under VA Servicer Handbook M26-4, Chapter 5, the VA Home Retention Waterfall is the sequence of loss-mitigation options a servicer must offer before initiating foreclosure. That waterfall is what the VA rescinded on May 1, 2025. Ask your servicer in writing: what loss-mitigation options are currently available under my VA-guaranteed loan, and which VA circular authorizes each one? Get the answer in writing before you sign anything.

Check the circular library for updates. The VA publishes all program changes as circulars at benefits.va.gov/homeloans/resources_circulars.asp. The circulars are searchable by date. If a replacement program exists, it will appear there first. Search for "VASP" and "home retention" in the 2025 and 2026 sections. If nothing appears, the replacement does not exist yet.

Contact the National Consumer Law Center. Steve Sharpe, the NCLC attorney who testified before the House Committee on Veterans' Affairs, has written extensively on VA loss-mitigation rights. The NCLC website maintains a veterans housing page with template letters and servicer complaint templates. A written complaint to your servicer, copied to the VA's Loan Guaranty Service, is the first procedural step if you are facing foreclosure on a VA loan.

Call your congressional representative. The congressional record from the March 2025 House Committee hearing contains both the MBA warning and the NCLC response. That record is public. If your representative voted to cut VASP funding or voted against a replacement program appropriation, that vote is on the record. Ask the representative's office whether they have introduced or co-sponsored legislation to restore VASP or a comparable loss-mitigation pathway for VA loans.

Preserve your Trial Payment Plan records. If you are currently in an active TPP that began before May 1, 2025, the VA's circular allows you to continue through August 31, 2025. Document every payment, every communication with your servicer, and every written confirmation of your TPP status. If your servicer attempts to foreclose before that date despite an active TPP, that is a violation of the circular you can cite in a complaint to the VA and a cease-and-desist letter to the servicer.

The VA circular that ended VASP is one page. It does not say what it cost to save a veteran's home. It does not say what it cost when that home was foreclosed. Those numbers exist in the servicing data the VA has not published. Until the VA publishes them, every veteran holding a VA loan in 2026 is operating without the loss-mitigation map the program once provided, and with no public timeline for when that map will be restored.