Pending Bills Concerning VA Home Loan

[mbl22885]

I wanted to bring to your attention two bills currently under consideration in Congress that could significantly impact our VA home loan benefits: the "Veterans Housing Stability Act of 2024" (H.R. 7898) and the "VA Home Loan Program Reform Act."

Both bills aim to provide the Secretary of Veterans Affairs with new authorities to help prevent or mitigate foreclosures for veterans with VA-guaranteed home loans who are facing financial hardship. Some key provisions include:

1. Allowing the VA to make partial payments to lenders to bring loans current.
2. Requiring the VA to establish a formal "Partial Claim Program" to help veterans avoid foreclosure.
3. Imposing new requirements on lenders to assist veterans in default.

While these measures could provide much-needed relief for veterans struggling to keep their homes, there is a concerning aspect to both bills that we should all be aware of.

Both bills contain language that would severely restrict veterans' ability to appeal VA decisions related to home loan defaults and foreclosure avoidance measures. Specifically, they state that the Secretary's decisions in these matters would be "final and conclusive and not subject to judicial review." They also say these decisions would not be treated as decisions under a law that affects benefits, for purposes of appealing to the Board of Veterans' Appeals (BVA).

In essence, this means that if the VA denies a veteran assistance under these new programs, or if a veteran believes the VA's decision was unfair or based on errors, they would have no recourse to challenge the decision in federal court or through the BVA appeals process. This is a significant departure from current law and could leave veterans without key protections.

While the intent behind these bills to help veterans avoid foreclosure is commendable, we must ensure that any changes to the law do not come at the expense of our fundamental right to due process. Losing the ability to appeal to a court or the BVA on matters as consequential as home foreclosures is deeply concerning.

I encourage all of you to learn more about these bills and to make your voices heard to your representatives in Congress. We fought to defend the Constitution, and we must insist that our own rights to due process and fair appeals are protected.

I'll continue to monitor the progress of these bills and provide updates as they become available. In the meantime, please share your thoughts and concerns. Together, we can work to ensure that any changes to our VA home loan benefits are in the best interest of all veterans.

https://www.govtrack.us/congress/bills/118/hr7898/text

https://docs.house.gov/meetings/VR/VR10/20240612/117409/BILLS-1188647ih.pdf

[Tbird]

Good info. Thanks for the heads up.

[mbl22885]

In my previous post, I discussed two pending bills that could significantly impact our VA home loan benefits. Recent events surrounding the Veterans Affairs Servicing Purchase (VASP) program have only heightened my concerns about the forces at play in shaping these policies.

The VA introduced VASP as a potential solution for veterans facing foreclosure, with the agency purchasing the home loan from the lender and assuming the role of servicer to offer more favorable terms. Despite the VA's release of comprehensive guidance on the program, the loan industry has responded with resistance and calls for delays in implementation.

These delay tactics, pushed by major industry groups representing mortgage lenders and servicers, appear to prioritize the financial interests of the industry over the urgent needs of veteran borrowers. By postponing VASP's implementation while simultaneously pressing for the continuation of the foreclosure moratorium, these groups are effectively leaving struggling veterans in limbo, denying them access to the very assistance VASP was designed to provide.

Even more alarming is the apparent alignment of certain members of Congress with the loan industry's agenda. During a recent Subcommittee on Economic Opportunity hearing, Chairman Van Orden openly expressed skepticism about VASP, questioning its cost-effectiveness and the VA's ability to administer it. This stance, coupled with the introduction of the VA Home Loan Program Reform Act, suggests a concerted effort to undermine VASP and prioritize industry interests over veterans' needs.

The VA Home Loan Program Reform Act, championed by Chairman Van Orden and supported by ranking member Mike Bost, contains provisions that would severely limit veterans' due process rights by restricting their ability to appeal VA decisions. This attempt to curtail our legal protections is a blatant example of prioritizing industry preferences over veterans' rights, as it would leave us vulnerable to unfair or inaccurate decisions without adequate means of recourse.

The fact that this bill has thus far received little public criticism is deeply concerning and highlights the need for our active engagement and advocacy. To this point, said advocacy is not coming from any of the major Veterans Service Organizations. We cannot allow the loan industry and their allies in Congress to strip away our hard-earned rights and benefits under the guise of "reform."

As veterans, we must remain vigilant and demand transparency from both the VA and Congress. We must call out attempts to prioritize industry interests over our own and fight against any erosion of our due process rights. By sharing our stories, educating our fellow veterans, and pressuring our elected representatives, we can push back against these troubling developments and ensure that the VA Home Loan program serves its intended purpose: to support and protect veteran homeowners.

 

1. ⁠⁠“As the members of this Subcommittee are aware, MBA continues to call for authorization of a permanent partial claim program as the industry’s preferred solution.” Testimony of Mark A. Jones, House Committee on Veterans’ Affairs, Subcommittee on Economic Opportunity, Oversight Hearing, February 15, 2024

http://chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.congress.gov/118/meeting/house/116827/witnesses/HHRG-118-VR10-Wstate-JonesM-20240215.pdf

 

2. “Let me be clear, VASP is a last resort option that may be available when it is the most appropriate home retention option under VA's home retention waterfall," VA Under Secretary for Benefits Joshua Jacobs said.

https://www.military.com/daily-news/2024/04/10/va-introduces-new-last-resort-loan-program-help-roughly-40000-veterans-keep-their-homes.html?amp

 

3. “Although VA’s public announcement suggests the program will be available for all 40,000 Veterans beginning May 31, 2024, based 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.”

https://www.mba.org/docs/default-source/policy/vasp-implementation-letter_may-2024_mba-and-hpc.pdf?sfvrsn=5e2164fc_1

 

4. https://benefits.va.gov/WARMS/docs/admin26/m26_04/m26-4-chapter9-va-purchase.pdf

 

5. “VA’s Home Loan program is a vitally important benefit for veterans and transitioning servicemembers to achieve the American dream of owning a home,” said Chairman Bost. “But as interest rates show no signs of coming down in any significant way, and the cost of living is higher than ever under the Biden administration, VA must do better to ensure veterans remain attractive homebuyers and don’t default on their mortgage payments. While the current foreclosure moratorium being extended does temporarily ensure that veterans will not be foreclosed on, it does not solve the long-term problem. VA must put election year politics aside and find a permanent solution so that we do not jeopardize the integrity of the VA home loan program, veterans can stay in their homes, and we do not evolve into a financial burden of billions of dollars in bailouts for lenders. I look forward to working with the Department to fix their mess through legislation in the coming weeks.

In February, the Subcommittee on Economic Opportunity held an oversight hearing on the future of the VA home loan program and Subcommittee Chairman Rep. Van Orden (R-Wis.), pressed the Department on their lack of transparency regarding creating the Veterans Affairs Service Purchasing (VASP) Program...”

https://veterans.house.gov/news/documentsingle.aspx?DocumentID=6466

 

6. “Recently, Congressman Van Orden and House Veterans’ Affairs Committee Chairman Mike Bost (R-IL) introduced the VA Home Loan Program Reform Act, which authorizes the Secretary of VA to take certain actions to prevent or resolve a default of a housing loan for veterans, such as loss mitigation options and a partial claim program.”

https://vanorden.house.gov/media/press-releases/van-orden-spearheads-veterans-affairs-home-loan-program-update

[broncovet]

Interesting.  While I have never been a politician, nor have I ever "written a bill" presented to congress, I can see some of the challenges faced here, and with other VA benefits, too.  

Part of the problem lies "with the Veterans", because we rarely publicly respond to those public requests where input is solicited when regulations are changed.  

And, you pointed out the problems with VSO's, who largely fail to represent our interests as well.  

Remember, the VSO's often get compensation "based on the number of POA's" the service organazation has FROM the VA.  A VSO who serves 2000 Veterans a year, probably gets way way way less than a large organizaation which may serve a million or more Veterans per year.  As it should.  But that means the VSO "gets paid" xx dollars for every POA (power of attorney which allows the VSO to represent the veteran).   

The net effect is that VSO's "get a commission" based on the number of POA's, and they are motivated to get us to sign a POA.  

This is widely abused by VSO's.  First, after the Vet signs the POA, its well known that its a crime for VSO's to return Veterans phone calls, since that only happens about 10 percent of the time, to my count.  Get that POA signed, and forget that Vet and dont return his calls..you may have work to do for him/her.  

Further, VSO's often have "free rent" in VARO offices.  That is, the VA provides office space, and maybe phone and utilities for the exclusive use of VSO's at VA expense.  Remember the slogan "there is no such thing as free rent"?   Well, there is no doubt in my mind that VA "expects" VSO's getting free rent (all of them) to "follow certain VA guidelines" when advising Vetereans.  These guidelines often consist of things like:

1.  Tell a Veteran who is applying for an increase that they should not do this and put fear into them that VA will reduce them instead.  "Dont poke the Bear", and "let sleeping dogs lie", and a few others come to mind.  THis is terrible and convinces Veterans they need to remain in poverty, and just accept whatever pittance VA offers and never appeal, dont ask for an increase, and just settle in to live in poverty with less benefits than you deserve.  

2.  Tell Vets to "only apply for one benefit at a time" and wait till you get that one to apply for soemthing else, then see rule 1, above, when he does.  

3.  Doing certain things delays our benefits.  Like submitting evidence, getting an IMO, appealing condition A, when you already have applied for condition B.  It assists Va by delaying the effective date as long as possible, which is their goal.  Pay the lowest amount possible.  

[mbl22885]

Hey Broncovet,

I don't know much about VSOs, but you pretty much covered everything there is to say. I went through the VFW at one point with disability claims, but I remember noticing the free rent at VARO offices like you said and thinking, "You guys (the VFW) have to maintain a working relationship with the VA, and that probably limits how hard you can push on individual cases, so I'm probably better off handling my claims myself."

 

I've been "fighting" with VBA Loan Guaranty for over two years now. My loan fell behind due to Hurricane Dorian and then the pandemic. I kept trying to get help from the VA, but it was like talking to a brick wall. They kept giving me the runaround, ignoring my questions, and failing to enforce their own rules. I'm actually in the process of appealing to the BVA right now. It's been a long and challenging road, but I'm determined to hold the VA accountable for their failures.

To be honest, these bills really scare me. It feels like they're trying to sweep the VA's problems under the rug and silence veterans who are trying to get the benefits they deserve. If they take away our right to appeal and redefine "provision of benefits," what's to stop them from doing the same thing with other VA programs? It's like an existential threat to all the protections veterans have fought so hard for - the BVA, the duty to assist, the benefit of the doubt - all of it could be at risk.

It's my view that the VA really messed up handling mortgage defaults during COVID. They ignored their own rules, failed to oversee servicers, and left countless veterans hanging out to dry. Now it seems like Congress is more concerned with bailing out the VA and the lenders than making things right for the veterans who were harmed.

 

 

[mbl22885]

I wanted to provide an important update on the VA Home Loan Reform Act, which I previously brought to your attention alongside the Veterans Housing Stability Act of 2024 (H.R. 7898).

Recent developments:

1. Markup and Committee Review: The House Veterans Affairs Subcommittee on Economic Opportunity recently held a markup hearing on the VA Home Loan Reform Act. The bill is now scheduled for review by the full House Veterans Affairs Committee. This advancement is a crucial step in the legislative process.
2. New Loss Mitigation Provision: The bill now includes a provision that allows (but does not require) the VA to prescribe a mandatory sequence of loss mitigation options that lenders must offer to veterans. This could potentially standardize the assistance offered to struggling veteran borrowers, but its effectiveness will depend on how the VA chooses to implement it.
3. Due Process Restrictions Remain: Critically, the bill still contains the deeply concerning language we discussed previously. It states that decisions made under the new Partial Claim Program would be "final and conclusive and not subject to judicial review" and would not be treated as decisions affecting the provision of benefits for appeal purposes. This means veterans would still be unable to challenge these decisions in federal court or through the Board of Veterans' Appeals.
4. Partial Claim Program: The bill continues to establish a new Partial Claim Program aimed at helping prevent or resolve defaults, but with the restrictions on appeals, veterans could be left without recourse if they disagree with the VA's decisions under this program.

These developments, particularly the bill's advancement to the full committee while retaining the restrictions on veterans' due process rights, are deeply concerning. While the new loss mitigation provision could potentially help some veterans, it does not offset the fundamental issue of stripping away our ability to challenge unfair or erroneous decisions.

I urge all of you to closely monitor these developments and contact your representatives to voice your concerns about these due process restrictions. We must insist that any changes to our VA home loan benefits preserve our rights to fair treatment and appeal.

Not to be alarmist, but this seems to set the stage for a return to a world where VA decisions were not subject to review, judicial or otherwise. This harkens back to an era before the Veterans' Judicial Review Act of 1988, when veterans had no recourse to challenge VA decisions in court. The progress made in veterans' rights over the past few decades could be significantly undermined by these provisions.

 

VA Home Loan Program Reform Act amendment: https://docs.house.gov/meetings/VR/VR10/20240627/117450/BILLS-118-8647-V000135-Amdt-1.pdf