NCLC’s Alys Cohen Urges VA To Take Steps to Keep Veterans in Their Homes
WASHINGTON – Today, Alys Cohen, director of federal housing advocacy at the National Consumer Law Center (NCLC) testified before the House Committee on Veterans’ Affairs Subcommittee on Economic Opportunity during its hearing, “Kitchen Table Issues: Lowering Costs for Veteran Families Through the VA Home Loan Program,” urging the U.S. Department of Veterans Affairs (VA) to act quickly to help Veterans struggling with their mortgages and to prioritize affordability.
“The mortgage relief options available for Veteran borrowers remain less favorable than the options available to other borrowers with federally backed mortgages,” said Cohen. “We urge the VA to stabilize homeownership for Veterans who earned the home loan benefit through service and sacrifice.”
Roughly 90,000 veteran homeowners are more than 90 days late on their mortgage payments. The VA Home Loan Program Reform Act promised to give these borrowers a second chance to keep their homes, but the VA’s proposals under the new law do not do enough to make the agency’s home retention program affordable. Under the VA’s approach, over 30,000 Veterans would face an average increase on their monthly payment of $150, or $1,800 per year.
VA can best promote affordability for borrowers by using the recent authority Congress provided to design an effective loss-mitigation system. Veteran borrowers facing financial hardship should have at least the same access to workout options to bring their loans current and avoid foreclosure as borrowers with loans backed by Fannie Mae, Freddie Mac, and FHA.
Research shows that providing payment relief to borrowers facing financial hardship helps avoid redefaults and saves the taxpayers tens of thousands of dollars in claims.
“The most important step the VA can take to promote affordability for Veterans is to help them retain their homes when feasible and avoid devastating home loss,” said Cohen. “These ‘home retention’ programs keep kids in school, stabilize neighborhoods, prevent home equity loss, and allow Veterans to avoid an unforgiving rental market.”
Cohen highlighted a number of important issues that VA should address to improve the effectiveness of its program, including: prioritizing affordable monthly payments; making standard forbearance available and establishing a full-pay forbearance program until the new program is up and running; and explicitly directing mortgage servicers to establish payment plans to help veterans address balloon payments when the new Partial Claim is due at the end of the borrower’s loan. A Partial Claim places the overdue amounts at the end of the mortgage term so the borrower can resume their regular payments.
“The VA should take steps to improve home-saving options in a manner that protects the VA Loan Guaranty Fund, eliminates unnecessary burdens on loan servicers, and stabilizes homeownership for Veterans who earned the home loan benefit through service and sacrifice,” Cohen said.
Related Resources
- Press release: New Mortgage Relief Law Will Help Thousands of Veterans Avoid Foreclosure, July 31, 2025
- Press release: Advocates, Members of House Committee on Veterans’ Affairs Call on VA to Revive VASP Program, May 20, 2025
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