Carrington Mortgage Services’ Elizabeth Balce Testifies on VA Home Lending

(Screenshot via House Committee on Veterans Affairs Youtube)

Elizabeth Balce, Executive Vice President of Servicing, Carrington Mortgage Services, testified Tuesday at a legislative hearing before the Committee on Veterans’ Affairs Subcommittee on Economic Opportunity.

Hearing details and a recording can be found here. Click here for Balce’s written statement.

[Note: Please find Elizabeth Balce’s prepared oral statement below. She may add to or subtract from these remarks during the course of his testimony. Portions of the text may be omitted during the testimony.]

Chairman Van Orden, Ranking Member Pappas, and members of the Subcommittee, thank you for the opportunity to testify today on behalf of the Mortgage Bankers Association. My name is Elizabeth Balce, and I am the Executive Vice President of Servicing at Carrington Mortgage Services.

I am here in my capacity as a member of MBA. As a lender with extensive experience in servicing VA mortgages, I am honored to testify before this panel.

MBA appreciates the Subcommittee’s commitment to preserving and strengthening the VA Home Loan Program, ensuring it remains an effective and accessible option for our nation’s heroes. Veterans have earned this benefit, and it is our shared responsibility to help them achieve sustainable homeownership.

A key priority for MBA and our members is ensuring that if a veteran homeowner faces financial hardship, they have loss mitigation options that are on par with those of the Federal Housing Administration (FHA). Especially in today’s volatile interest rate environment, veterans deserve the same level of protection as other federally backed borrowers. Unfortunately, the VA Home Loan Program lacks a permanent partial claim option, which is a widely used tool that allows borrowers facing temporary hardship to move missed payments to the end of their loan. This ensures stability without the burden of immediate repayment.

A partial claim is a proven foreclosure prevention tool used by FHA. It would allow veterans to stay in their homes, while VA and taxpayers remain protected because the funds are repaid when the veteran sells or refinances. Despite the introduction of the VASP program to address the current high-interest rate environment, veterans should not have fewer loss mitigation options. A permanent partial claim program will protect veterans and the VA.

MBA supports the partial claim program in the VA Home Loan Program Reform Act. However, several changes are needed to ensure the program is workable and provides maximum benefit to veterans.

First, the bill must clarify that a partial claim does not reduce the VA guaranty on the first mortgage. If a partial claim is deducted from the 25% loan guaranty, lenders will be left with little to no remaining coverage, increasing risk and making VA loans less competitive in the market. This could reduce veterans’ access to VA mortgages.

Second, the bill currently requires veterans to begin repaying their partial claim within three years to maintain a 0% interest rate, with a 0.5% interest rate imposed if repayment is delayed. Veterans should not be subjected to unnecessary repayment burdens that could jeopardize their ability to remain in their homes. This is inconsistent with other government partial claims and would prove difficult to operationalize.

Third, the bill sunsets the partial claim program on September 30, 2027. This would significantly limit its effectiveness. A longer effective window—such as five years—would ensure meaningful assistance for more veterans.

Finally, shifting to VASP, this tool has provided critical relief to thousands of veterans whose loan payments became unaffordable in today’s higher rate environment. While partial claims should be the first line of defense, VASP has been an essential safety net for borrowers who had no other options. Without VASP, VA would have foreclosed on tens of thousands of veterans.

MBA strongly opposes the Restoring the VA Home Loan Program in Perpetuity Act, which imposes an arbitrary cap of 250 loans per fiscal year. Rather than limiting VA’s ability to assist veterans, Congress should focus on strengthening loss mitigation tools like a permanent partial claim so that VASP becomes a tool of last resort, not the only option available.

Another ongoing concern for MBA is the VA funding fee, which has repeatedly been increased or extended to offset the costs of unrelated veteran benefits. We urge Congress to stop using the VA funding fee as a budgetary offset and ensure it remains aligned with the home loan program’s mission.

Thank you again for the opportunity to testify today. MBA looks forward to working with you to establish a permanent partial claim program, improve and preserve VASP as a necessary tool, and ensure the VA home loan program remains a strong and competitive option for veterans.

I look forward to your questions.