Veterans turned out big for Trump. His response?

Help for troubled vet homeowners dashed, consumer protection programs important to vets slashed

The Trump Administration professes great respect and concern for veterans, but it has a funny way of showing it. Most notably, Trump’s Veterans Administration is ending a program that helps tens of thousands of financially troubled veterans hang onto their homes.

The doomed program was known as VASP, the VA Servicing Purchase program. It has helped an estimated 72,000-81,000 vets who were or, in many cases, still are delinquent on their mortgage payments. As the program winds down, they face a heightened risk of foreclosure.

According to exit polls on Election Day, 65% of veterans voted for Donald Trump, while 34% voted for Kamala Harris, but memories are short and veterans aren’t getting the results they expected.

In a recent NPR broadcast, a veteran's wife expressed frustration about how veterans were being characterized in the VASP affair, saying: "That was so hurtful because these are not bum loans, and they're making the veterans and their families out to sound like irresponsible people."

Veterans are furious. "My social media posts have not been nice to the director of the VA and have not been nice to Trump. And I voted for the guy!" said Jon Henry, who served in Iraq during the first Gulf War.

"It's like, damn, you keep talking big about how you're doing all this for the veterans, but you just turned your back on 80,000 vets that have VA loans," said Henry, also in the NPR broadcast. Retired Navy Special Operations diver Matthew Kelly described his own predicament as “infuriating and it's devastating.”

Dems rush to the defense but lack firepower

Sen. Richard Blumenthal (D-CT) and Sen. Lisa Blunt Rochester (D-DE) denounced the VASP wind-down and laid the groundwork for legislation that would create a new mortgage relief program for veterans.

“Secretary Collins’ decision to end the VASP Program without consulting Congress, veterans, or service lenders was an act of consummate cruelty and incompetence,” the senators said in a joint statement. “Our legislation will create a replacement program to ensure veterans have a last resort option to continue paying their mortgage and keep their homes.”

The House of Representatives has passed a measure that would let veterans defer missed mortgage payments and turn them into interest-free secondary loans and that measure has gone to the Senate. If both houses can agree on a replacement, it would go to Trump’s desk for action – and what that would be is unknown.

GOP favors abandoning the vets

Oddly, Republicans – who would normally be expected to support troubled veterans – praised the VA’s decision to shut down VASP, claiming the program was a financial threat to taxpayers and, perhaps most tellingly, to the private mortgage industry.

Trump himself has not commented on VASP but VA Secretary Doug Collins, representing the Trump Administration before a Senate committee, said, “The VASP program is something that we do not need to be in.” He said the VA shouldn’t be serving as a mortgage-restructuring entity.

VA press secretary Pete Kasperowicz reiterated this point in an April statement, adding that the program was “unilaterally created by the Biden administration and lacks congressional authority.” He said “VA is not set up or intended to be a mortgage loan restructuring service.”

“We had serious concerns about the impact VASP would have on not only the future of VA’s home loan program but the mortgage lending business as a whole, Reps. Mike Bost (R-IL) and Derrick Van Order (R-WI) said in a statement to CNN several weeks ago, implying that the American home lending is in financial straits.

Really?

According to industry data, the mortgage banking sector typically generates tens of billions in annual revenue. For example, the Mortgage Bankers Association tracks that mortgage originations in recent years have ranged from around $2-4 trillion annually depending on interest rates and market conditions, with lenders typically earning 1-2% in fees and profits on originations.

The largest mortgage lenders like Rocket Mortgage, Wells Fargo, and Chase each generate billions in mortgage-related revenue annually. The top 25 mortgage lenders combined typically account for the majority of the market.

Blame COVID for VASP

VASP was launched in response to a surge in mortgage delinquencies following the expiration of COVID-era mortgage support programs. It helped troubled vets by buying delinquent loans and modifying them to reduce interest rates and make payments more manageable. It came about after an NPR investigation found that many veterans were facing foreclosure because of hardships beyond their control.

Veterans groups, housing advocates and Democratic lawmakers have all been pressing for a replacement program, warning that many veterans have nowhere else to turn.

“Halting the VASP program will increase the number of veterans facing foreclosure,” Bob Broeksmit, president of the Mortgage Bankers Association said. “VASP was the only viable home retention option for many veteran homeowners.”

In a March letter to Congress, the Center for Responsible Lending and the National Consumer Law Center estimated that as many as 81,000 VA borrowers could face foreclosure without an alternative program.

“The Administration’s abrupt cancellation of the VASP mortgage assistance program, for Veteran borrowers in need, puts tens of thousands of Veteran families with VA home loans at risk of losing their homes. The VA Home Loan Program is a benefit that Veterans have earned through service and sacrifice to give them housing stability,” said Alys Cohen, senior attorney at NCLC.

“The termination of VASP results in Veteran borrowers having substantially worse options than other borrowers with federally backed mortgage loans. As a result, Veterans with VA mortgages will face preventable foreclosures. The end of VASP leaves more than 58,000 Veterans and their families vulnerable to foreclosure,” Cohen added.

Business First

This is a familiar pattern. The Trump Administration has kneecapped several agencies and programs that benefit veterans and other groups that Trump appealed to in his campaign, including the Consumer Product Safety Commission, the Consumer Financial Protection Bureau and the Federal Trade Commission.

The administration doesn’t necessarily deny that the consumer protection programs it targets are serving a valid purpose. Instead it claims they were set up improperly, don’t have the proper Constitutional underpinnings, aren’t financed properly and are costing industry billions of dollars.

But look beneath the surface and you find that the programs Trump targets have government working on behalf of consumers instead of leaving them to the tender mercies of the free enterprise marketplace. Thus, instead of helping vets hang onto their homes, it throws them at the feet of predatory lenders.

The CFPB has been, in effect, been going backwards, declining to enforce many vital regulations and even trying to eliminate existing court judgments and refund fines and settlement payments companies made to settle the cases, even as the agency declines to prosecute cases because it says it wants to concentrate on helping veterans and service members.

You wouldn’t exactly say the Administration is lying. It’s just talking backwards – saying one thing while doing another.