H.R.1815 - VA Home Loan Program Reform Act (119th Congress)
Summary
H.R.1815, the VA Home Loan Program Reform Act, aims to amend Title 38 of the United States Code to provide the Secretary of Veterans Affairs with greater authority to intervene in cases of default on VA-guaranteed home loans. The bill introduces a 'Partial Claim Program,' allowing the VA to purchase a portion of the loan indebtedness to prevent foreclosure. It also mandates a specific sequence of loss mitigation procedures that lenders must offer to veterans before the VA purchases the loan.
Expected Effects
The act is likely to reduce foreclosures among veterans by providing more options for avoiding default. It will also change the procedures that lenders must follow when working with veterans who are at risk of default. The Act also increases appropriations for comprehensive service programs for homeless veterans, potentially reducing homelessness among this population.
Potential Benefits
- Reduced risk of foreclosure for veterans.
- Increased flexibility for the VA in managing loan defaults.
- Mandated loss mitigation procedures to protect veterans.
- Financial assistance to veterans who experienced financial hardship between March 1, 2020, and May 1, 2025.
- Increased funding for homeless veteran programs.
Most Benefited Areas:
Potential Disadvantages
- Potential for increased government spending due to partial claim program.
- Possible delays in foreclosure proceedings due to mandated mitigation sequence.
- Complexity for loan holders in adhering to new requirements.
- The program terminates five years after enactment, creating uncertainty for long-term planning.
- Potential for moral hazard if veterans take on excessive debt knowing the VA may intervene.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). Congress has the power to legislate in areas concerning veterans' affairs, as implied by Article I, Section 8, which provides for the common defense and general welfare. The specific mechanisms for loan guarantees and interventions are policy choices within Congress's purview.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).