The Senate’s recent unanimous passage (July 15) of bipartisan legislation to replace a Department of Veterans Affairs (VA) program is designed to help struggling veterans avoid foreclosure.

The VA Home Loan Program Reform Act (H.R. 1815) would authorize the U.S. Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the VA, among other things. It would allow the VA to create a new five-year partial claims program through which the VA could purchase a portion of a loan that is in danger of default.

Under the partial claims program, the VA would take over payments for part of a loan (up to 25 percent of unpaid principal, or up to 30 percent for veterans who missed payments between March 1, 2020, and May 1, 2025) on primary residences at risk of foreclosure.

Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit released a statement noting his trade group’s support for the bill.

“This important legislation, which passed the House in May, is a critical step forward in ensuring that distressed veteran homeowners have access to a proven and sustainable loss mitigation solution,” Broeksmit said. “We thank Senate Veterans’ Affairs Committee Chairman Jerry Moran (R-KS) and Ranking Member Dick Blumenthal (D-CT) for their leadership during this process, including their willingness to work with the Trump administration, their colleagues, and key stakeholders to pass this loss mitigation authority for the VA so expeditiously.”

MBA leaders have been persistent in urging the agency and lawmakers to find a suitable replacement for the VA’s COVID-19 Veterans Assistance Partial Claim program, which was sunset in October 2022.