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The VA has its fix for a home loan debacle, but many vets who got hurt won't get help
Edmund Garcia, an Iraq War veteran, stands outside his home in Rosharon, Texas. Like many vets, he was told if he took a mortgage forbearance, his monthly payments wouldn’t go up afterward.
Joseph Bui for NPR
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Edmund Garcia, an Iraq War veteran, stands outside his home in Rosharon, Texas. Like many vets, he was told if he took a mortgage forbearance, his monthly payments wouldn’t go up afterward.
Joseph Bui for NPR
The Department of Veterans Affairs announced a long-awaited new program on Wednesday to help thousands of veterans who were left on the verge of losing their homes after a pandemic aid effort went awry.
But it appears that many who were harmed financially won’t qualify to get this new help.
“The purpose of this program is to assist the more than 40,000 veterans who are at the highest risk of foreclosure,” Josh Jacobs, VA undersecretary for benefits, said at a media roundtable introducing the Veterans Affairs Servicing Purchase program, or “VASP.”
What senior VA officials failed to say on their call with reporters is that the VA put veterans in that tough spot in the first place. In 2022, the VA abruptly ended part of its COVID mortgage forbearance program while tens of thousands of vets were still in the middle of it — trapping them with no affordable way to get current on their loans.
VASP is supposed to fix that problem, by allowing the VA to offer these homeowners loan modifications with interest rates that are well below the market rates on regular mortgages. The VA will own mortgages itself and will offer vets who qualify a modified home loan with a 2.5% interest rate.
But not everybody who got hurt is going to qualify. Most vets who have already ended up in much more costly modified loans won’t get the help.
The VA forbearance fiasco
In November, the VA halted foreclosures for all homeowners with loans backed by the VA after an NPR investigation revealed that the agency had left thousands of vets facing foreclosure through no fault of their own.
COVID mortgage forbearance programs were set up by Congress during the pandemic to help people with federally backed loans by giving them an affordable way to skip mortgage payments and then get current on their loans again.
But in late 2022, the VA abruptly ended its Partial Claim Payment (PCP) program, which had allowed a homeowner at the end of a forbearance to move the missed payments to the back of the loan term and keep the interest rate on their original mortgage.
That effectively turned a well-intentioned program into a bait-and-switch trap. Veterans say they were told before they took a forbearance that their regular monthly mortgage payments wouldn’t increase and their missed payments could be moved to the back of their loan term. But after the VA scrapped the PCP program, vets were told they needed to come up with all the missed payments at once.
“Almost $23,000? How am I gonna come up with that?” Edmund Garcia asked earlier this year in an interview with NPR. Garcia is a combat veteran who served in Iraq. He bought a house in Rosharon, Texas, with a VA home loan. After his wife lost her job during the pandemic, his mortgage company offered him a forbearance.
Edmund Garcia holds a photo of himself in 2000 as a specialist in charge of handling ammunition and supplies while he was in the Army.
Joseph Bui for NPR
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Joseph Bui for NPR
Edmund Garcia holds a photo of himself in 2000 as a specialist in charge of handling ammunition and supplies while he was in the Army.
Joseph Bui for NPR
The VA had other loan modification options, but those essentially required a new mortgage with a new interest rate, and rates were rising sharply — from around 3% up to around 7%.
Garcia was told that if he couldn’t pay back all the missed payments at once, he would have to accept a loan modification that would result in much bigger monthly bills. His old mortgage rate was 2.4%; the offer would increase that to 7.1% with payments $700 a month higher. Alternatively, he could get foreclosed on.
“I deal with PTSD, I deal with anxiety, and, you know, my heart is beating through my chest when I was having this conversation,” he told NPR. “My daughter … she’s asking, ‘Dad, are you OK?’ “
Now it appears that any veterans who succumbed to that pressure and accepted these higher-cost loan modifications will not be able to get help through the VA’s new rescue plan.
Vets pushed into high-cost loans won’t get help
“If you are not in default, this program is not for you,” John Bell, the director of the VA home loan program, told NPR at a press call this week. “And you have to be in default a certain amount of time.”
In other words, veterans who have been making payments on these higher-cost loans are not eligible. And it’s looking like that will exclude a lot of people.
Data obtained by NPR suggests that thousands of veterans ended up in modified loans with significantly higher interest rates following a mortgage forbearance.
The fine print to the VA’s new program also says that if a loan was modified, the borrower has to have made payments for at least six months, and then be in default for at least three months, to be eligible.
That doesn’t seem like the right approach to some policy experts.
“We definitely don’t think borrowers should have to pay six months on a bad, unaffordable modification,” said Steve Sharpe with the nonprofit National Consumer Law Center.
Also, the rules mean that if a veteran tried to pay a more costly loan modification for a few months, then defaulted and couldn’t afford it, they wouldn’t qualify.
“If they fail on an unaffordable modification, they should be able to access VASP,” Sharpe said.
He thinks the VA should extend the foreclosure moratorium on VA loans, which is set to expire at the end of May, both to give the VA time to consider fixing such issues and to give mortgage companies time to gear up and reach out to homeowners.
Still, Sharpe said, for those who do qualify, the VASP rescue plan should be a big help.
“It is great news that VASP has been released,” he said. “It is sorely needed because people have lacked a reasonable foreclosure alternative for a long time. … It’s exciting.”
VA Undersecretary Jacobs told reporters that a key difference with the new program is that the VA will hold the loans itself, rather than simply guarantee loans that are owned by investors. That’s what will allow the VA to set whatever mortgage rate it wants.
“These borrowers will have a consistent, affordable payment for the remainder of their loan at a fixed 2.5% interest rate,” Jacobs said.
Back in Rosharon, Texas, Edmund Garcia is wondering what happens next.
Edmund Garcia stands with his wife, Iris Garcia, inside their home, where they live with their four daughters. Iris lost her job during the pandemic and their mortgage company offered them a forbearance.
Joseph Bui for NPR
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Joseph Bui for NPR
Edmund Garcia stands with his wife, Iris Garcia, inside their home, where they live with their four daughters. Iris lost her job during the pandemic and their mortgage company offered them a forbearance.
Joseph Bui for NPR
“I was a little shocked to hear that I would have to qualify for this program,” Garcia told NPR this week.
The VA says borrowers should work with their mortgage company and contact a VA loan technician if they need help.
In Garcia’s case, he actually never accepted that more-costly loan modification. And it appears from a review of the rules that he should qualify for VASP. But there’s a catch. Under the rules, he’ll probably be put into a 40-year mortgage. That could end up happening to a lot of other veterans too.
“At the end I’ll be 82,” Garcia says. But he would still be very happy to get the help.
“This would be a huge relief for my family,” Garcia says. “And it feels like it’s within arm’s grasp.”
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Senate Adopts GOP Budget, Laying the Groundwork to Fund ICE and Reopen DHS
The Senate early Thursday morning adopted a Republican budget blueprint that would pave the way for a $70 billion increase for immigration enforcement and the eventual reopening of the Department of Homeland Security.
Republicans pushed through the plan on a nearly party-line vote of 50 to 48. It came after an overnight marathon of rapid-fire votes, known as a vote-a-rama, in which the G.O.P. beat back a series of Democratic proposals aimed at addressing the high cost of health care, housing, food and energy. The debate put the two parties’ dueling messages on vivid display six months before the midterm elections.
Republicans, who are using the budget plan to lay the groundwork to eventually push through a filibuster-proof bill providing a multiyear funding stream for President Trump’s immigration crackdown, used the all-night session to highlight their hard-line stance on border security, seeking to portray Democrats as unwilling to safeguard the country.
Democrats tried and failed to add a series of changes aimed at addressing cost-of-living issues, seizing the opportunity to hammer Republicans as out of touch with and unwilling to act on the concerns of everyday Americans.
Here’s what to know about the budget plan and the nocturnal ritual senators engaged in before adopting it.
Republicans are seeking a way around a filibuster on D.H.S. funding.
The budget blueprint is a crucial piece of Republicans’ plan to fund the Department of Homeland Security and end a shutdown that has lasted for more than two months. After Democrats refused to fund immigration enforcement without new restrictions on agents’ tactics and conduct, the G.O.P. struck a deal with them to pass a spending bill that would fund everything but ICE and the Border Patrol. Republicans said they would fund those agencies through a special budget bill that Democrats could not block.
“We can fix this with Republican votes, and we will,” said Senator Lindsey Graham, Republican of South Carolina and the Budget Committee chairman. “Every Democrat has opposed money for the Border Patrol and ICE at a time of great peril.”
In resorting to a new budget blueprint, Republicans laid the groundwork to deny Democrats a chance to stop the immigration enforcement funding. But they also submitted themselves to a vote-a-rama, in which any senator can propose unlimited changes to such a measure before it is adopted.
The budget measure now goes to the House, which must adopt it before lawmakers in both chambers can draft the legislation funding immigration enforcement. That bill will provide yet another opportunity for a vote-a-rama even closer to the November election.
Democrats used the moment to hammer Republicans on affordability.
Democrats took to the floor to criticize Republicans for supercharging funding for federal immigration enforcement rather than moving legislation that would address Americans’ concerns over affordability.
“This is what Republicans are fighting for,” said Senator Chuck Schumer, Democrat of New York and the Democratic leader. “To maintain two unchecked rogue agencies that are dreaded in all corners of this country instead of reducing your health care costs, your housing costs, your grocery costs, your gas costs.”
Democrats offered a host of amendments along those lines, all of which were defeated by Republicans — and that was the point. The proposals were meant to put the G.O.P. in a tough political spot, showcasing their opposition to helping Americans afford high living costs. Fewer than a handful of G.O.P. senators crossed party lines to support them.
Republicans blocked Democrats’ proposals to address high living costs.
The G.O.P. thwarted an effort by Mr. Schumer to require that the budget measure lower out-of-pocket health care costs for Americans. Two Republicans who are up for re-election this year, Senators Susan Collins of Maine and Dan Sullivan of Alaska, voted with Democrats, but the proposal was still defeated.
Republicans also squelched a move by Senator Ben Ray Lujan, Democrat of New Mexico, to create a fund that would lower grocery costs and reverse cuts to food aid programs that Republicans enacted last year. Ms. Collins and Mr. Sullivan again joined Democrats.
Also defeated by the G.O.P.: a proposal by Senator John Hickenlooper, Democrat of Colorado, to address rising consumer prices brought on by Mr. Trump’s tariffs and the war in Iran; one by Senator Edward J. Markey, Democrat of Massachusetts, to require the budget measure to address rising electricity prices, and another by Mr. Markey to create a fund to bring down housing costs.
Senator Jon Ossoff, a Democrat who is up for re-election in Georgia, also sought to add language requiring the budget plan to address health insurance companies denying or delaying access to care, but that, too was blocked by Republicans.
Republicans sought to amplify their hard-line messages on immigration, voter I.D. and transgender care.
While Republicans had fewer proposals for changes to their own budget plan, they also sought to offer measures that would underscore their aggressive stance on immigration enforcement and dare Democrats to vote against them.
Mr. Graham offered an amendment to allocate funds toward a deficit-neutral reserve fund relating to the apprehension and deportation of adult immigrants convicted of rape, murder, or sexual abuse of a minor after illegally entering the United States. It passed unanimously.
Senator Josh Hawley, Republican of Missouri, sought to bar Medicaid payments to Planned Parenthood, which provides abortion and other services, and criticized the organization for providing transgender care to minors. Senator John Kennedy, Republican of Louisiana, also attempted to tack on the G.O.P. voter identification bill, known as the SAVE America Act. Both proposals were blocked when Democrats, joined by a few Republicans, voted to strike them as unrelated to the budget plan.
The Republicans who crossed party lines to oppose their own party’s proposals for new voting requirements were Ms. Collins along with Senators Mitch McConnell of Kentucky, Lisa Murkowski of Alaska and Thom Tillis of North Carolina.
Ms. Collins and Ms. Murkowski also opposed the effort to block payments to Planned Parenthood.
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Who is John Phelan, the US Navy Secretary fired by Pete Hegseth?
The firing of US Navy Secretary John Phelan is the latest in a shakeup of the American military during the war on Iran, now in its eighth week.
The Pentagon said Phelan would leave office immediately.
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“On behalf of the Secretary of War and Deputy Secretary of War, we are grateful to Secretary Phelan for his service to the Department and the United States Navy,” said chief Pentagon spokesperson Sean Parnell. “We wish him well in his future endeavours”.
His firing comes at a critical moment, with US naval forces enforcing a blockade on Iranian ports and ships, and maintaining a heavy presence around the Strait of Hormuz, through which 20 percent of the world’s oil and gas passes during peacetime.
Although the Pentagon gave no official reason for the dismissal, reports indicate the decision was linked to internal disputes, including tensions with Defense Secretary Pete Hegseth.
Phelan’s removal is part of a broader pattern of dismissals and restructuring within the US military under President Donald Trump’s administration – including during the current war.
So, who is John Phelan, and what impact could his firing have on US military strategy?
Who is John Phelan?
As the US Navy’s top civilian official, Phelan had various responsibilities, including overseeing recruiting, mobilising and organising, as well as construction and repair of ships and military equipment.
He was appointed in 2024 as a political ally of Trump, despite having no prior military or defence leadership experience.
Before entering government, Phelan was a businessman and investment executive, as well as a major Republican donor and fundraiser — a background that is fairly common among Trump appointees and advisers. The US president’s two top diplomatic negotiators, for instance, are Steve Witkoff — a real estate businessman with no prior diplomatic experience – and Trump’s son-in-law, Jared Kushner.
According to the Reuters news agency, Phelan’s tenure quickly became controversial. He faced criticism for moving too slowly on shipbuilding reforms and for strained relationships with key Pentagon figures, including Hegseth and his deputy, Steve Feinberg.
In addition, Phelan was reportedly under an ethics investigation, which may have weakened his standing in the administration.
Navy Undersecretary Hung Cao, who was also reported to have a difficult relationship with Phelan, has become acting secretary. Fifty-four-year-old Cao is a 25-year Navy veteran who previously ran as a Republican candidate for the US Senate and House of Representatives in 2022 and 2024 respectively, but was unsuccessful on both occasions.
Democrats have criticised Phelan’s removal, calling it “troubling”.
“I am concerned it is yet another example of the instability and dysfunction that have come to define the Department of Defense under President Trump and Secretary Hegseth,” said Senator Jack Reed, the top Democrat on the Senate Armed Services Committee.
Who else has the Trump administration fired since the war with Iran began?
Phelan’s removal is the latest in a series of senior military leaders being fired or are leaving during the US-Israeli war on Iran, in addition to others since Trump was re-elected.
Among the most notable dismissals was Army Chief of Staff General Randy A. George, in the first week of April. George was appointed in 2023 under former US President Joe Biden.
According to reports, Hegseth also fired the head of the Army’s Transformation and Training Command, a unit concerned with modernising the army, and the Army’s chief of chaplains. The Pentagon has not confirmed their dismissal.
Why is Phelan’s dismissal significant?
The 62-year-old’s removal comes during a fragile ceasefire with Iran, as the US continues to move more naval assets into the region.
The Navy is central to enforcing Trump’s blockade of Iranian ports to restrict Iran’s oil exports and apply economic pressure on Tehran, as the US president looks eager to wrap up the war, which is deeply unpopular to many Americans.
However, there are no indications that Trump is willing to end the blockade or other naval operations in the Strait of Hormuz, as negotiations between Washington and Tehran have come to a standstill.
Tensions have escalated in recent days after the US military seized an Iranian container ship. The US claimed it was attempting to sail from the Arabian Sea through the Strait of Hormuz to the Iranian port of Bandar Abbas.
Tehran responded by describing the attack and hijack as an act of “piracy”.
Iran has since captured two cargo ships and fired at another.
News
Not a Deal-Breaker: White House Downplays Iranian Action Near the Strait
Just two weeks ago, President Trump threatened to wipe out Iran’s civilization if it did not open the Strait of Hormuz. Days later, he said any Iranian “who fires at us, or at peaceful vessels, will be BLOWN TO HELL!”
Yet on Wednesday, after Iran seized two ships near the Strait of Hormuz, the White House was quick to argue the action was not a deal breaker for potential peace negotiations.
“These were not U.S. ships,” Karoline Leavitt, the White House press secretary, said on Fox News. “These were not Israeli ships.” Therefore, she explained, the Iranians had not violated a cease-fire with the United States that Mr. Trump has extended indefinitely.
She cautioned the news media against “blowing this out of proportion.”
The surprisingly tolerant tone from the White House suggests Mr. Trump is not eager to reignite a war that he started alongside Israel on Feb. 28 — a war that has proved unpopular with Americans and has gone on longer than he initially estimated.
The president on Tuesday extended a cease-fire between the United States and Iran that had been set to expire within hours, saying he wanted to give Tehran a chance to come up with a new proposal to end the war.
The American military has displayed its overwhelming might during the war, successfully striking thousands of targets. But it remains unclear whether Mr. Trump will accomplish the political objectives of the war.
The Iranian regime, even after its top leaders were killed, is still intact. Iran has not agreed to Mr. Trump’s demands to turn over its nuclear capabilities to the United States or significantly curtail them. And the Strait of Hormuz, a key passageway for world commerce that was open before the war, remains closed.
Nevertheless, the White House has repeatedly highlighted the military successes on the battlefield as evidence it is winning the war.
“We have completely confused and obliterated their regime,” Ms. Leavitt said on Fox Wednesday. “They are in a very weak position thanks to the actions taken by President Trump and our great United States armed forces, and so we will continue this important mission on our own.”
The oscillation between threats and a more conciliatory tone has long been one of Mr. Trump’s signature negotiating strategies.
Potential peace talks between the two countries are on hold. Vice President JD Vance had been poised to fly to Islamabad for negotiations. But the trip was postponed until Iran can “come up with a unified proposal,” Mr. Trump said.
The United States recently transmitted a written proposal to the Iranians intended to establish base-line points of agreement that could frame more detailed negotiations. The document covers a broad range of issues, but the core sticking points are the same ones that have bedeviled Western negotiators for more than a decade: the scope of Iran’s uranium enrichment program and the fate of its stockpile of enriched uranium.
Mr. Trump has not spoken publicly about the cease-fire, other than on social media. On Wednesday, he also posted about topics including “my Apprentice Juggernaut” — a reference to his former television show; the Virginia elections, which he called “rigged”; and a new book about Supreme Court Justice Samuel A. Alito Jr.
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