Investigations

< Trump's VA killed a home loan program. Vets are now losing their homes because of it

STEVE INSKEEP, HOST:

We have an update on an NPR investigation that began three years ago and exposed a debacle at the Department of Veterans Affairs. The VA put thousands of veterans at risk of home foreclosures through no fault of their own. The problem started under the Biden administration, and the Biden administration rolled out a program to fix it. Then President Trump killed that program, despite warnings that killing it would cause veterans to lose their homes. Now veterans are losing their homes. NPR's Chris Arnold and Quil Lawrence report.

CHRIS ARNOLD, BYLINE: More than 10,000 veterans have lost their homes in foreclosure sales since Trump's VA, with no warning, shut down that program last May. That's the highest level in a decade, according to industry data.

QUIL LAWRENCE, BYLINE: Leann Ledford is one of them. The hardest thing for her is that she's been here before and fought her way out.

LEANN LEDFORD: When you lose your home, your house, like, nothing else matters.

ARNOLD: Ledford's husband was hurt in Afghanistan. He has PTSD and a brain injury, but it took a long time for the VA to approve his disability pay. And back in 2018, his condition got so bad that he couldn't work.

LEDFORD: Obviously, I can't just leave my husband at home if he's having - you know, at first, we didn't know whether it was a stroke or a seizure or what was going on.

ARNOLD: So they were both out of work with a young kid. Soon they couldn't afford rent.

LEDFORD: So we had to use the last bit of our savings and cash out our retirement and buy a travel trailer and trade in my Jeep for a truck.

LAWRENCE: They hitched that camper to their truck and lived out of it for six months. But then they managed to get back on their feet, and by 2021, they bought a house with a VA home loan. That's just what the VA loan is supposed to do - give veterans a leg up into the middle class and home ownership.

ARNOLD: But then thousands of vets found themselves trapped by a series of missteps by the Department of Veterans Affairs, and that has now pushed the Ledfords to the brink of eviction.

LEDFORD: We didn't know that the foreclosure sale went through until somebody knocked on the front door.

LAWRENCE: The mortgage industry warned the Trump administration this was going to happen. The crisis started in 2022 when the Biden administration abruptly ended a COVID-era mortgage-relief program. That's what trapped the Ledfords and lots of other vets. The Biden VA took two years to fix the problem. But once the fix was finally up and running - a program called VASP - it started saving the homes of large numbers of veterans.

ARNOLD: Yeah. VASP gave 33,000 vets affordable, low-interest-rate loans. But some Republicans in Congress thought that the program cost too much, and they wanted to kill it and replace it. The mortgage industry back then was basically warning, please, God, don't kill this VASP program before you actually do replace it with something different.

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ELIZABETH BALCE: Without VASP, VA would have foreclosed on tens of thousands of borrowers.

LAWRENCE: That was Elizabeth Balce of the Mortgage Bankers Association at a congressional hearing in March of last year. She was asked what would happen if VA scuttled the VASP program.

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BALCE: Foreclosure. And then that's...

UNIDENTIFIED PERSON: Yeah.

BALCE: The short answer is foreclosure.

ARNOLD: And now that's what's happening because Trump's VA shut down VASP anyway.

LAWRENCE: It's hard to say just how many of those 10,000 vets who lost their home to foreclosure could have been helped by the VASP program. And some, like the Ledfords, could have afforded to keep their homes if the program had survived.

ARNOLD: But their lender didn't get them into the program by the time it got closed to any more vets, and now it's too late. Leann Ledford says her husband's PTSD symptoms had improved after they bought this house. Now he's having seizures again. Even talking about losing this house has stressed him out so much that he asked not to record an interview.

LEDFORD: I haven't seen him struggle this bad in years - since the first time he started having seizures and new health issues from his traumatic brain injury.

LAWRENCE: In a written statement, the VA said, quote, "VA worked tirelessly with the Ledford family to help keep them in their home. However, they were nearly four years behind on their mortgage payment." What the VA didn't mention is that many families, like the Ledfords, weren't permitted to make mortgage payments - sometimes for years - after the VA trapped them in a bureaucratic quagmire.

ARNOLD: It all started after the pandemic hit the U.S. economy. Homeowners were offered what's called a forbearance. That's a pause in your mortgage payments. And thousands of veterans took it.

LEDFORD: You know, we weren't getting out of our payments. It was just a pause, and it felt like such a relief for us.

ARNOLD: But this is where things first went off the rails. Four years ago, the Biden VA turned off a repayment program that was part of that forbearance, and veteran families like the Ledfords were stuck with a terrible choice. Again, they were not allowed to resume making their regular monthly mortgage payments unless they first paid back all the missed payments. That's tens of thousands of dollars due all at once. There was one other option. They could basically refinance, but mortgage rates had jumped from 3% to 7%. So the Ledfords couldn't afford any of those options.

LAWRENCE: And many vets who did take that refi option - they got hit with punishingly higher monthly payments. Gulf War vet Jon Henry saw his payment go up $380 a month.

JON HENRY: And it's like, what the hell? You know, with groceries, gas and everything else, with all that being inflated - and it's like, this is ridiculous.

ARNOLD: Same thing with Afghanistan vet Shante Benfatto.

SHANTE BENFATTO: I mean, that's dire. It hurts paying $3,200 a month.

ARNOLD: Jerome Thomas, an Air Force veteran, got stuck in a new loan that doubled his interest rate for his family of five and raised their monthly payment by $800.

JEROME THOMAS: I don't have the means to afford that much money. You know, I got my three kids in here. I got, you know, the wife. She's a teacher.

LAWRENCE: And here's the thing to understand. All these vets were hoping to get into VASP, the program meant to fix this whole mess. But when the Trump administration killed it and didn't replace it with anything, they were stranded.

ARNOLD: Now, nearly a year later, VA has finally just released a draft of its new program. But VA says that won't be up and running until June, and vets are losing their homes right now. Meanwhile, mortgage industry groups say that the draft of the VA's new program would still leave many veterans worse off than people who never served, and lawmakers agree that the program still needs work.

LAWRENCE: The new program won't do anything to help any of the vets you heard from in this story. It's already too late for them, including the Ledfords.

LEDFORD: You can't stabilize in life if you don't have, like, a stable home.

LAWRENCE: The VA said in a statement that it helped thousands of vets to avoid foreclosure, but it didn't offer specifics.

ARNOLD: VA said it stands ready to assist the Ledfords with health care services as needed. They've been asked to vacate their home by April 3. That's tomorrow.

Chris Arnold.

LAWRENCE: And Quil Lawrence, NPR News.

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