VA Under Scrutiny for Sending Faulty Mortgage Letters to Thousands of Veterans

The Department of Veterans Affairs is under examination as thousands of veterans received letters indicating they were delinquent on their VA-backed mortgages and potentially facing foreclosure—alerts that congressional officials claim could have been dispatched mistakenly.

This week, members of the House Veterans’ Affairs Committee have requested an explanation from VA Secretary Doug Collins regarding the distribution of the letters and the agency's plan to address the situation.

“For numerous veterans and their families, receiving such a notice can lead to considerable distress, confusion, and financial difficulties—even if it is sent by mistake,” stated Reps. Mark Takano (D-Calif.), Chris Pappas (D-N.H.), and Nikki Budzinski (D-Ill.) in a letter to Collins.

A congressional staffer informed Task & Purpose that approximately 35,000 veterans may have received the incorrect notices. The VA has yet to confirm the number or details surrounding how the incident took place.

Sean Saball, a former Marine sergeant and one of the homeowners impacted, expressed his concerns about potential identity theft or mortgage mistakes upon receiving his letter last month. The announcement stated that his loan servicer indicated he was overdue on payments.

“I was really concerned about how it would affect my credit,” said Saball, who purchased his Pittsburgh home with a VA loan in 2018. Upon contacting his mortgage company, he discovered that his payments were up to date. Upon contacting the VA, he was met with a recorded voicemail acknowledging that the letters were indeed an error and advising recipients to ignore them. Since then, he has not received any direct communication from the agency.

The legislators cautioned that there could be an opposite issue at play—that certain veterans entitled to valid foreclosure notifications might not have been reached, posing a similarly significant concern.

The situation arises amid scrutiny directed at the VA for discontinuing the Veterans Assistance Servicing Program, a Biden-era initiative that enabled the agency to acquire defaulted VA loans and refinance them at a fixed interest rate of 2.5%. The initiative successfully assisted tens of thousands of veterans in sidestepping foreclosure, but it officially ceased accepting new applications on May 1.

The VA clarified in a statement to NPR that the program “was not set up or intended to be a mortgage loan restructuring service.”

Legislators described the choice to terminate the program as “hasty” and indicated that the incorrect foreclosure notifications further eroded veterans’ trust in the VA.

“In light of this situation, the extensive circulation of incorrect foreclosure notices not only erodes trust in VA’s loan servicing practices but also imposes unnecessary emotional and financial burdens on veterans who depend on VA for precision, assistance, and representation,” they stated.

The VA has indicated it will address congressional inquiries directly, but a public explanation has not yet been provided.