House veterans subcommittee grills VA and industry on VASP, partial-claim options and taxpayer risk

House Veterans' Affairs Subcommittee members questioned Department of Veterans Affairs officials and mortgage-industry witnesses about the scope and risks of the VA Servicing Purchase Program, or VASP, and whether the department should adopt a permanent partial-claim option to prevent foreclosures.

The discussion matters because tens of thousands of VA-backed borrowers face higher mortgage costs in a rising-rate environment, and the choice of relief tools affects both how many veterans keep homes and the size of taxpayer exposure.

VA witnesses said VASP was a last-resort tool deployed during a period of sharply higher rates, and that the department is evaluating other loss-mitigation options. ‘‘We have 15,000 veterans that are in the VASP program,’’ John Bell, executive director for loan-guarantee services at the Department of Veterans Affairs, told the subcommittee. Industry witnesses and some lawmakers urged adoption of a permanent partial-claim program instead, arguing it would better preserve homeownership while limiting taxpayer risk.

Mortgage bankers said partial claims allow missed…