The Let Freedom Ring Initiative

During the COVID-19 pandemic, the U.S. Department of Veterans Affairs (VA) issued clear instructions to servicers on how to help veteran homeowners. VA Circulars such as 26-21-07, 26-20-10, and later 26-24-03 required servicers to pause payments, protect borrowers from fees, and offer affordable deferment options without added interest.

Instead, as veterans emerged from forbearance, many encountered prohibited practices: lump-sum repayment demands, pressure to accept higher-cost loan modifications, document “glitches,” and even foreclosure notices issued during ongoing reviews. These widespread reports formed the basis of what veterans now call the COVID Servicing Scandal.

What VA Required Servicers to Do

According to VA policy, servicers were required to:

• Offer true deferment—moving missed payments to the end of the loan without fees or added interest (VA Circular 26-21-07).
• Use the full loss-mitigation waterfall to ensure the least costly option was chosen for the veteran.
• Not punish veterans for using CARES Act forbearance (CARES Act).
• Provide clear, timely communication and avoid unnecessary delays.

These were not suggestions—they were binding federal requirements.

What Veterans Reported Instead

Veterans across the country reported troubling patterns that contradict VA policy:

• Lump-sum demands—even though VA policy did not require lump-sum repayment when deferment was available.
• High-rate loan modifications pushed as the “only solution.”
• Paperwork purgatory: months of repeated document submissions and claims that files were “lost.”
• Foreclosure threats issued during active reviews.

These patterns were visible in hundreds of public complaints, including those documented in the CFPB Consumer Complaint Database, BBB archives, and forums like Reddit’s r/VeteransBenefits.

Case Study: Cyrus v. PennyMac

In Cyrus v. PennyMac, a federal class-action lawsuit alleges PennyMac pushed veterans into costlier modifications after deferring options quietly expired—without proper notice. The case survived early dismissal attempts.

Its allegations mirror what many veterans reported experiencing with other servicers, including Freedom Mortgage.

Veterans’ Stories: A National Pattern

Based on public accounts, including Reddit threads, CFPB complaints, and BBB reports, veterans describe:

• Freedom Mortgage claiming deferments were “not available” when they were.
• Foreclosure notices arriving during active reviews.
• Modification offers that increased monthly payments by hundreds of dollars.
• Incorrect forbearance math that inflated arrears.

These reflect consumer allegations, not adjudicated findings—but the consistency is striking.

The VA Tried to Fix the Crisis—But Too Late

VA attempted several temporary rescue programs, including the Veterans Affairs Servicing Purchase (VASP) program, which launched on May 31, 2024. But VA abruptly halted new VASP submissions effective May 1, 2025 (VA Home Loans).

This left thousands of veterans stranded—especially those stuck in long modification cycles.

The 2025 VA Home Loan Program Reform Act

On July 30, 2025, Congress enacted the VA Home Loan Program Reform Act (Public Law 119-31), a sweeping update designed to modernize VA authority.

Major provisions include:

• Partial-claim authority to rescue delinquent loans.
• Mandatory waterfall sequencing to prevent servicer abuse.
• Direct payment authority to avoid unnecessary foreclosures.
• A five-year pilot program to evaluate loss-mitigation effectiveness.

But the Law Does NOT Fix the Past

While historic, the law is almost entirely forward-looking. It does not:

• Order retroactive reviews of 2020–2024 COVID servicing conduct.
• Provide automatic relief to veterans forced into costly mods.
• Require servicers to correct improper COVID-era decisions.
• Fund enforcement staff to monitor chronic offenders.

As a result, the many thousands of veterans harmed during the COVID mortgage era are left without a clear path to justice.

The Let Freedom Ring Amendment: Closing the Gap

The Let Freedom Ring Amendment fills the gaps Congress left open. It would require:

• Mandatory retroactive audits of all VA-backed loans serviced during COVID.
• Compensation for veterans harmed by non-compliant servicing.
• Public accountability mechanisms for servicers.
• Permanent legal protections against discriminatory or predatory servicing practices.

Audit Your VA Mortgage (45-Minute Checklist)

1. Request your full loan history and all loss-mitigation documents.
2. Compare your servicing path to VA Circulars 26-21-07 and 26-20-10.
3. Flag any lump-sum repayment demands.
4. Identify whether you were harmed during the 2022–2024 VA relief gap.
5. Submit a RESPA Notice of Error (12 U.S.C. §2605).
6. File a CFPB complaint with documentation attached.
7. If you are in default, contact a VA loan technician immediately.

Bottom Line

The COVID mortgage crisis did not simply “happen” to veterans—it was shaped by policies servicers ignored and relief programs that collapsed midstream. Veterans were promised the least costly, most sustainable option. Instead, many were left with years of financial damage.

It is time for transparency. It is time for accountability. It is time to Let Freedom Ring.

References

1. VA Circulars 26-21-07, 26-20-10, 26-24-03 — https://www.benefits.va.gov/homeloans/
2. NPR Reporting — https://www.npr.org
3. CFPB Consumer Complaint Database — https://www.consumerfinance.gov/data-research/consumer-complaints
4. BBB Complaints (Freedom Mortgage) — https://www.bbb.org/us/fl/boca-raton/profile/mortgage-broker/freedom-mortgage-corporation-0633-90066682
5. Cyrus v. PennyMac — https://www.bursor.com/military-veteran-defeats-motion-to-dismiss-in-class-action-lawsuit-against-va-mortgage-servicer/
6. Reddit Veterans Forums — https://www.reddit.com/r/VeteransBenefits
7. VA VASP Program — https://www.va.gov/housing-assistance/home-loans
8. Public Law 119-31 (2025 Reform Act) — https://www.congress.gov/bill/119th-congress/house-bill/1815