Chris Arnold
Appearances
NPR News Now
NPR News: 05-22-2025 7PM EDT
Fannie and Freddie are the most powerful forces in the multi-trillion dollar U.S. mortgage market. And they've been prisoners of the Treasury Department ever since their bad investments forced a government bailout during the 2008 crash. So President Trump is basically talking about letting Fannie and Freddie out of jail.
NPR News Now
NPR News: 05-22-2025 7PM EDT
But a former official tells NPR that there's a way to do that where investors that hold the old Fannie and Freddie stock get wiped out. And another way to do it where those investors would make billions. The biggest holder of that old stock is reported to be Bill Ackman, a backer of President Trump.
NPR News Now
NPR News: 05-22-2025 7PM EDT
Taking Fannie and Freddie public would also be complicated, and if done wrong, it could cause turmoil in the stock and bond markets. Chris Arnold, NPR News.
Planet Money
The Rest of the Story, 2024
OK, so it was about zombie mortgages, which are about as scary as they sound. Better than boring. Better than boring. But you still do not want to have one of these pop up if you own a house. Sure. These are loans that come from way back 2005, 2006 during the housing bubble. And back then, a lot of people got two loans when they bought a house.
Planet Money
The Rest of the Story, 2024
And the first mortgage was the bigger one for most of the money that they needed to borrow to buy the house. And then they got a smaller second mortgage to basically cover the down payment. Then the housing crash happened and millions of Americans were facing foreclosure.
Planet Money
The Rest of the Story, 2024
Right. Which all seem great, except that homeowners are now getting calls from debt collectors who say, you know what? That loan didn't die. You owe me the money. Sometimes it's twice what people borrowed in the first place and they're demanding payment on these old loans.
Planet Money
The Rest of the Story, 2024
Yeah, thousands of people. And we did an episode back in May about a woman named Karen McDonough. She's a nurse who lives in Quincy, Massachusetts. And in the episode, we told how one morning she looked out her window and she was just shocked to see this group of men gathering on her lawn. And there was one guy who was like in charge with a clipboard.
Planet Money
The Rest of the Story, 2024
So he told Karen that her home was being foreclosed on and auctioned off. And this is the house that Karen had owned for 17 years. She'd raised her kids in this house and she'd been making payments on it. So this was, of course, like really upsetting for Karen.
Planet Money
The Rest of the Story, 2024
Well, one thing is that government officials have also been looking at this issue. And after a story came out, I interviewed the attorney general in Massachusetts, Andrea Campbell, and it was pretty cool. She actually knew about our episode.
Planet Money
The Rest of the Story, 2024
And her office has started to take some action. It turns out the AGs there have been investigating one of these companies that's been foreclosing on people's homes. The company's named Franklin Credit Management. The AG alleges it was breaking state and federal law by trying to collect on these debts.
Planet Money
The Rest of the Story, 2024
The company did not admit wrongdoing, we should say, but to avoid the risk of litigation, it struck a settlement with the AG.
Planet Money
The Rest of the Story, 2024
And what she's talking about with the $10 million there is that the company basically agreed to forgive all of the mortgages it controls for people in the state of Massachusetts. And that's more than 500 loans.
Planet Money
The Rest of the Story, 2024
Yeah, I mean, for sure. This settlement involved just one company and what they're doing in just one state. So Karen McDonough, the settlement doesn't help her. She's still trying to get ownership of her home back from a different company that foreclosed on it. But consumer law groups are hoping that there will be more to come with the government cracking down.
Planet Money
The Rest of the Story, 2024
And Alexi, I can tell you that NPR's investigations unit is also paying attention and we're talking to more homeowners and finding more companies that are doing this. So stay tuned. All right. We definitely will.
Planet Money
The veteran loan calamity
Hey, it's Kenny Malone. for an NPR Politics podcast episode dropping a few hours after that kind of thing. And then finally, there is Consider This. That is the podcast where NPR covers one big story in depth every weekday evening. So up first in the morning, Consider This in the evening, and the NPR Politics podcast anytime big stuff happens.
Planet Money
The veteran loan calamity
As Chris and Quill dug into this, they discovered that there were as many as 40,000 veterans now stuck, unable to get back onto that mortgage payment highway. 40,000 veterans that were on the path to losing their homes.
Planet Money
The veteran loan calamity
Now, again, the Queens were about to lose their house. They say it was scheduled for the next foreclosure auction. And this next part of the story, Chris and Quill are just sort of running between the Queens and the Department of Veterans Affairs, just trying to figure out why the VA blew up the on-ramp. And so they go to the VA and they ask, why did you do this?
Planet Money
The veteran loan calamity
Why did you blow up the one affordable option for veterans to start repaying their mortgage?
Planet Money
The veteran loan calamity
Now, the VA did seem to know there was a problem, to be fair. They said that they were working on a new on-ramp, if you will, a new way for people to start repaying again by sort of resetting the mortgage to a super low interest rate. But... The VA admitted to Chris and Quill that whole thing wasn't going to be ready for months.
Planet Money
The veteran loan calamity
They're greeted by the homeowners, Ray and Becky Queen. Ray served in the army in Iraq.
Planet Money
The veteran loan calamity
Chris and Quill go back to Ray Queen, explain all of this. And Ray is like, well, if the fix is coming, don't foreclose on us. Like give the fire trucks time to show up.
Planet Money
The veteran loan calamity
Chris and Quill go back to the VA, manage to get a sit-down interview with the person in charge of the VA loan program, John Bell, and just tell him what Ray said.
Planet Money
The veteran loan calamity
In other words, still no help for Ray and Becky and any other veterans about to lose their houses. So this time, Chris goes to the airwaves.
Planet Money
The veteran loan calamity
Chris puts all of this reporting into a story, includes the Queens.
Planet Money
The veteran loan calamity
And and this is where things really start to kind of blow up.
Planet Money
The veteran loan calamity
Uh-huh. WTF, your own language there, I assume, not the senatorial.
Planet Money
The veteran loan calamity
Chris and Quill would later call up one of those senators, Montana Democrat John Tester.
Planet Money
The veteran loan calamity
Tester is chairman of the Senate Veterans Affairs Committee. So, you know, he's in charge of the committee that oversees the VA.
Planet Money
The veteran loan calamity
So, yeah, this angry letter from Tester and the other senators went off to the VA. And then by the end of the week...
Planet Money
The veteran loan calamity
Chris called the Queens before news about the foreclosure moratorium had gotten out.
Planet Money
The veteran loan calamity
When Chris first met Ray and Becky Queen, they were about to lose their house because somewhere in some governmental office, a decision was made about how to help veterans keep their homes during COVID, and it had gone catastrophically wrong.
Planet Money
The veteran loan calamity
Okay. It's been a year since that phone call. After the break... Everything is fixed. No. No. No way. No, it's not.
Planet Money
The veteran loan calamity
Not fixed. So a foreclosure pause is useful, but the whole point of that was to buy time for the Department of Veterans Affairs to roll out this permanent fix, this program that it was calling VASP.
Planet Money
The veteran loan calamity
Let's call it the bailout plan. Good plan. So, the bailout plan. If you are a veteran who is facing foreclosure, the VA will go to the bank or more likely the investors who hold your mortgage, and they will take the mortgage back from them.
Planet Money
The veteran loan calamity
Yeah, the bailout essentially gives the VA the ability to take over the mortgages of veterans like the Queens and then allow the Queens to restart affordable mortgage payments, specifically at 2.5% for up to 40 years. It lets the VA offer a new on-ramp back onto the old mortgage payment highway.
Planet Money
The veteran loan calamity
Except... We do have one final stop on this story because during their year of reporting, Chris and Quill kept looking at this solution, this bailout, and saying, I think there is a huge hole in this VA fix. A big group of veterans getting left out here.
Planet Money
The veteran loan calamity
Natalie had a very similar story to the Queens. During COVID, she had to stop working to take care of sick family, got forbearance on her VA loan, and then one day gets word that she cannot just start up payments again like she thought. Like the affordable on-ramp she thought that she would have was gone. And just like the Queens, she was instead presented with very bad on-ramps back to repayment.
Planet Money
The veteran loan calamity
And these will sound very familiar. On-ramp number one, pay all the money back at once, more than $15,000 in this case. That's a lot of money. Uh... And she couldn't do it. And they offered her this mod. On ramp number two, take a loan modification. Again, basically a whole new mortgage, but interest rates had gone way up.
Planet Money
The veteran loan calamity
And to be clear here, this is all happening before the foreclosure pause, before that moratorium. So these were the only two options, the only two on-ramps for Natalie to resume payment and keep her house. Natalie's mortgage company gives her a deadline to decide whether or not to take on those higher payments.
Planet Money
The veteran loan calamity
Hello and welcome to Planet Money. I'm Kenny Malone. Today on the show, we ride along with our colleagues at NPR as they uncover a single change to some wonky mortgage terms that not many people were paying attention to. The result of that change, tens of thousands of veterans were about to lose their homes because of a policy meant to help keep them in those homes.
Planet Money
The veteran loan calamity
So unlike the Queens, Natalie decided to try somehow to make this loan modification thing work. Suddenly her monthly payments were 50% higher and she picked up every spare piece of work that she could find.
Planet Money
The veteran loan calamity
But she is still somehow doing it. And ironically, it is the fact that Natalie decided to try and make this higher mortgage thing work that is the problem. Because the bailout, the VASP program, it is only for people who have stopped making payments and are headed towards foreclosure, which puts someone like Natalie in a rough spot. I mean...
Planet Money
The veteran loan calamity
Yeah, strategic default would give some people in Natalie's situation access to the bailout program, but it would wreck Natalie's credit and her ability to get a loan anytime soon. And so she's still hustling, still scraping together those way higher monthly payments.
Planet Money
The veteran loan calamity
Chris and Quill have been trying to figure out how many Natalies there are out there, people who will not be helped by the big bailout plan, but probably still need help. So they asked the VA, did not get an answer, and then they FOIA'd a bunch of documents.
Planet Money
The veteran loan calamity
They got a bunch of documents through the Freedom of Information Act, and those appear to show that about 3,000 veterans took a loan modification and ended up paying at least 25% more And some paid a lot more. At least 1,000 vets ended up with monthly payments that were 50% higher than before, just like Natalie.
Planet Money
The veteran loan calamity
The Department of Veterans Affairs holds these press conferences every month with, like, the person in charge, the head of the VA, Secretary Dennis McDonough. And for the last year... Good afternoon, Quill. Hey, thanks. Can y'all hear me? Yep, we got you. Basically every month... We'll go to Chris.
Planet Money
The veteran loan calamity
Chris and Quill have been showing up and asking about VA mortgages.
Planet Money
The veteran loan calamity
At the most recent of these press conferences. Thanks, Dan. We'll go to Quill.
Planet Money
The veteran loan calamity
Will got the chance to ask the VA secretary Natalie Donaldson's specific question.
Planet Money
The veteran loan calamity
This is the most Chris Arnold way to start an interview. Oh, I'm sorry. The attorney general in another state is texting me about something else. Chris Arnold is a reporter for NPR's investigations team. He has been on the show many times before. And this particular story starts when Chris got a call from a lawyer.
Planet Money
The veteran loan calamity
As of this recording, the bailout plan, VASP, has just started to be rolled out. Today's episode was produced by James Sneed. It was edited by Meg Kramer and fact-checked by Dania Suleiman. Engineering by Sina Lafredo. Alex Goldmark is Planet Money's executive producer. And a very, very special thanks this week to Robert Benincasa and Bob Little. I'm Kenny Malone. This is NPR.
Planet Money
The veteran loan calamity
Yes, COVID mortgage forbearance. When COVID hit, 20 million people lost their jobs, but we hoped it was going to be a temporary thing. And so Congress said, like, hey, look, if you're a homeowner and you're in trouble, you are allowed to temporarily pause your mortgage payments and not lose your home. That is forbearance. And it's become an important part of the crisis playbook.
Planet Money
The veteran loan calamity
Yeah. And even when there is not a crisis, you can usually work with your lender to pause mortgage payments for just a few months. With COVID, though, the government extended that. Homeowners were ultimately allowed 18 months of forbearance. However, Chris was hearing that something was going very wrong with that system, and it seemed to be hitting one particular group of homeowners.
Planet Money
The veteran loan calamity
That is Quill Lawrence, our second guide today. Quill covers veterans affairs for NPR.
Planet Money
The veteran loan calamity
So Chris and Quill went searching for somebody who was in the middle of this big problem, somebody who was about to lose their home.
Planet Money
The veteran loan calamity
Ray and Becky were able to buy their home because of one of the key benefits of military service, what's known as a VA home loan. It's a loan that is backed by the Department of Veterans Affairs.
Planet Money
The veteran loan calamity
And the Queens are able to get that no money down, low rate mortgage in part because the Department of Veterans Affairs acts as this almost like very good, very rich friend for the Queens. The VA basically says to mortgage lenders, hey, you can lend to the Queens and we promise one way or another you'll get paid back. And look, like this is something the U.S.
Planet Money
The veteran loan calamity
It's an around-the-clock election news survival kit from NPR podcasts. Okay, thank you for listening. Here's the show.
Planet Money
The veteran loan calamity
government does for most people who buy a home. You've likely heard of Freddie Mac or Fannie Mae, the FHA. These are the massively rich friends that back most of the home loans in the U.S. And that makes it less risky for banks to make loans and has generally brought mortgage rates down. But yeah, anyway.
Planet Money
The veteran loan calamity
It is the Department of Veterans Affairs that helped Ray and Becky Queen get the house that they show to Chris and Quill.
Planet Money
The veteran loan calamity
When Chris first met the Queens, they were about to lose all of that. During COVID, Becky and Ray were among the millions of Americans who needed the help of mortgage forbearance. Becky's mom died of COVID. Becky had to take extended leave from her job and then lost her job. She called up the company that now handles her mortgage payments, and they told her, yeah, you can pause your payments.
Planet Money
The veteran loan calamity
Right. She says that they told her that when it was time to start making her mortgage payments again, nothing would really change. Those missed payments would move to the end of the loan. So basically, if she missed a year of payments, she would still owe those just, you know, like way, way down the road.
Planet Money
The veteran loan calamity
And to be clear, this is a very normal way to restart payments after forbearance. And the vast majority of homeowners who had trouble during COVID were able to resume making their mortgage payments in some affordable way. But a lot of military veterans with VA loans were not able to do that.
Planet Money
The veteran loan calamity
When the Queen's forbearance period was up, when they got their repayment options, that simple, affordable version of forbearance where you just move the missed payments to the back of the loan, it was nowhere to be found.
Planet Money
The veteran loan calamity
These are two of my colleagues, NPR reporters Quill Lawrence and Chris Arnold, and they're pulling up to a house.
Planet Money
The veteran loan calamity
The clock was ticking on the Queen's home. Chris starts calling, like, everyone, trying to get an answer to what exactly is going on here. I can't remember exactly. One thing led to another, and I finally found a guy. We'll call this person a well-positioned source. And Chris wound up talking to a bunch of people to confirm everything. But yes, he found a guy.
Planet Money
The veteran loan calamity
And what that well-positioned source explained to Chris was essentially that The VA was being a bad rich friend because you will recall the VA is supposed to be a good rich friend that vouches for veterans, you know, promises lenders that ultimately the VA can take the hit if someone stops paying their mortgage.
Planet Money
The veteran loan calamity
Well, now, when tens of thousands of veterans took COVID forbearance, they paused mortgages temporarily. But it was up to the VA to decide how those missed payments could eventually be paid back. Like literally to decide what the options would be for those homeowners when they were ready to start paying again. Chris has this useful way to picture the whole thing.
Planet Money
The veteran loan calamity
Kind of the house, really, that's been at the center of this astonishing and, frankly, pretty bizarre problem that has been unfolding over the last couple years. They get out of the car, microphones recording, of course. How are you doing?
Planet Money
The veteran loan calamity
Yeah, all those other, you know, rich friend entities, Fannie, Freddie, et cetera, that help people get mortgages. Well, they also got to determine their homeowners' forbearance repayment options, and those all seem to be going fine. What Chris's source was telling him was that sometime in October 2022...
Planet Money
The veteran loan calamity
The VA had stopped allowing the one repayment option that Ray and Becky Queen had thought they were getting, where they pause their payments, restart the payments, and the missed payments go all the way to the back of the loan. It was the VA's one affordable on-ramp.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
Yeah, right. A lot of these workers who've been fired are what are called probationary workers. And that can sound at first like, oh, well, maybe they got hired six months ago, so maybe it's not that big a deal. But in many cases, it's not that. You could have worked someplace for five, six, seven, ten years, and then you get a promotion and you're in a new job because you were doing a good job.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
You're a good worker. And now you're in a probationary period in that new job. So these folks were in that category. And I talked to Eileen and James Kramer, and they worked at a national park in Alaska. It's called Lake Clark National Park. These guys have both gotten promotions recently. Everything seemed good. And then they get these letters saying, you know what, you're doing a lousy job.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
And so you're fired today. No details, no reason. And it just looked like a formally letter with their names filled in. And here's Eileen and James.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
I mean, that's what's happening right now. I mean, there are lawyers just gathering these up, you know, and being like, here's the letter. It's the same as the other thousand letters. And when you actually look at the personnel file, you know, this person got this commendation and, you know, and also they're talking and it turns out their own supervisor was like, I don't want to fire this person.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
Well, there's one in federal court in San Francisco against the Office of Personnel Management, which apparently the lawsuit alleges a lot of these letters just came from OPM and then kind of went through the agencies. But it wasn't even these agencies saying, we want to fire these people. But it also zooms in on this idea like you were talking about, like, well –
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
You can't just lie and say these people did their jobs badly and use that as a justification to immediately terminate them. There was just another kind of related case. Things were resolved in the last couple of days involving the U.S. Office of Special Counsel. And a few workers were put back to work or will be in a couple of days.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
So, you know, the courts really might come back and say, you know what, guys, like this just wasn't done right. Like these federal workers have rights and you cannot fire them this way.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
Well, and I think like that's a big difference between the private sector, too. Right. I mean, if Musk buys Twitter, which became X, I mean, yeah, he's in charge. He can fire half the people. The parallel with the government like stops there. Right. It makes me think I used to cover Silicon Valley and you'd see guys who made gajillions of dollars.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
And then they're like, I want to solve public education. And they would try to wade in. And then they'd realize like, oh my God, no, I'm dealing with the unions. And I don't have like a room full of really smart grads from Stanford, like making this one thing. I'm dealing with a hundred things and they're all way more complicated. And it's like, it kind of reminds me of that.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
You know, it's like, it's just turning into this absolute swamp of tangled intention where, you know, anything he tries to do the way he would do it, say when he took over Twitter, is just going to spark lawsuits. Yeah.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
I mean, I think seeing how this plays out with federal workers and whether the courts are willing to say you didn't follow the rules and you can't just summarily fire tens of thousands of people and send out all these letters that essentially lie about things like that's just not OK. And you got to hire them all back. And let's do this like grownups.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
And if that's able to work, you know, I think that would be really interesting. And I don't know if that's what's going to happen.
The NPR Politics Podcast
How DOGE Cuts Are Impacting Federal Workers
Well, yeah, I mean, absolutely. Either way that goes, I mean, there's just there's a lot hanging on that for so many, so many federal workers, obviously.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
The judge said a lot, actually. This is a dramatic hearing. This is District Judge William Alsup. And one thing he said is that these workers were lied to about why they were fired. He said, quote, it's a sad day when our government would fire some good employee and say it was based on performance when they know good and well that that is a lie.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
And the idea there is that firing workers for bad performance made it easier to fire them, but it wasn't true. Many workers got glowing reviews from supervisors. They'd been doing a good job. We've spoken with some of these workers. The judge called the mass firing a sham to get around statutory requirements.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
And he said that the administration exceeded its authority by having one office in the government direct so many other agencies to just summarily fire all these workers.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
Right. The government argued that agencies made their own decisions. The firings were proper. But the judge, again, said, quote, you know, I tend to doubt that you're telling me the truth at that point. The White House is unamused by all of this.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
White House Press Secretary Caroline Leavitt said in a statement, quote, a single judge is attempting to unconstitutionally seize the power of hiring and firing from the executive branch. The administration has now appealed, but now it's not a single judge. Last night, this ruling came down in the second case. The judge sided with Democratic State Attorneys General.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
They put a 14-day stay in place on these mass firings. The government there had argued that the states didn't have standing and hadn't been harmed by the firings. Interestingly, though, we should say both judges said, look, we understand the government has a right to do a reduction in force, but it has to follow the law.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
I mean, one thing I've been struck by is that these are not all new hires. I mean, these are probationary workers, but a lot of them have been working in an agency for 10 years, say, and they're probationary because they just got a new job that they just got promoted. I talked to an employment attorney, Michelle Berkovich, about this. She's working on another effort to reinstate workers.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
And the plaintiff's attorneys in the case say the firings have made Swiss cheese of some of these agencies.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
Well, the judge in the San Francisco case said immediately. Berkovich is saying, don't count on this. The government's been dragging its feet with some of these orders. She's telling workers, look, if you're looking for another job or trying some kind of appeal, just keep doing that.
Up First from NPR
Congress Budget Vote, Trump Speaks At DOJ, Federal Workers Reinstated
Thanks, Layla.