Table of Content
Relevant information about this document from Regulations.gov provides additional context. This information is not part of the official Federal Register document. The LGP found more than 130,000 loans where a refund was potentially due, the agency said Tuesday. This material may not be published, broadcast, rewritten, or redistributed. Find out if you’re eligible and how to request a VA home loan COE as the surviving spouse of a Veteran or the spouse of a Veteran who is missing in action or being held as a prisoner of war.
The cost of rule familiarization is $99.90 for each guaranteed loan servicer, including the small servicers. The PRA cost estimates vary across servicers depending on how many COVID-19 forbearance loans they service that either meet or could potentially meet COVID-VAPCP requirements. An internal assessment indicates that approximately half of VA-guaranteed loans in forbearance will reach 360 days of forbearance sometime during the months of May and June of 2021. However, as discussed above, VA has been a part of the coordinated federal response that extends protections for borrowers with federally backed mortgages. Given these additional protections, VA now anticipates that most veterans currently in a COVID-19 forbearance will remain in such forbearance until at least late June 2021.
G. § 36.4806 Terms of the Assistance to the Veteran
A dependent child of an active-duty Servicemember also satisfies the occupancy requirement. When refinancing a VA- guaranteed loan solely to reduce the interest rate, a Veteran need only certify to prior occupancy. Under the Home Loan Guaranty Program, VA does not make loans to Veterans and Servicemembers; VA guarantees loans made by private-sector lenders.
However, the VA also recognizes that some disability rating applications can take an extended period of time. And, during that time period, a veteran may apply for a VA loan, pay the funding fee, and then receive an exemption after closing. If the VA approves your pending claim after loan closing but with a retroactive date before closing, you can receive a funding fee refund. Under normal circumstances, missed or delayed payments have an impact on your credit score. During the COVID-19 national emergency, however, if you werecurrenton your mortgage when the COVID-19 forbearance was granted, your mortgage company should report your account as current.
V. Effective Date of Final Rule
As evident from this final rule notice, public input was valuable to ensuring that VA implements a partial claim payment program that delivers on its commitment. VA is now faced with determining whether it should accelerate the effective date of this program beyond statutory timeframes outlined in the Congressional Review Act. Specifically, absent a showing of “good cause,” this final rule (which is a “major rule” under the CRA, see infra) will become effective the later of the date occurring 60 days after the date on which Congress receives the report, or the date the rule is published in the Federal Register. For reasons discussed below, VA does not believe acceleration of the effective date is necessary.
Without that documentation in hand, the buyer would not be exempt from the fee. VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. However, your closing package should state that you do claim exempt status.
A. General Comments
The funding fee is a percentage of the loan amount which varies based on the type of loan and your military category, if you are a first-time or subsequent loan user, and whether you make a down payment. You have the option to finance the VA funding fee or pay it in cash, but the funding fee must be paid at closing time. In paragraph , VA explains that if the servicer miscalculates the partial claim amount, resulting in an overpayment to the servicer, the amount of such overpayment shall constitute a liability of the servicer to the United States. The servicer will be required to remit the overpaid amount immediately to VA. In paragraph , VA states that if the servicer miscalculates the partial claim amount, resulting in underpayment (i.e., an amount insufficient to bring the guaranteed loan current), the servicer must waive the difference. Commenters correctly noted that VA has a longstanding history of not prescribing a required “waterfall” of home retention options.
The amount of the partial claim payment that VA will pay to the servicer, as calculated under paragraph of this section, shall not exceed 30 percent of the unpaid principal balance of the guaranteed loan. For the purposes of this paragraph , the unpaid principal balance of the guaranteed loan means such balance as of the date the veteran entered into a COVID-19 forbearance. Notably, one commenter stated that the cost to servicers to execute a partial claim payment under the proposed rule was roughly equivalent to the cost to execute a loan modification. As VA believes a loan modification would be the home retention option most likely to be used to resolve COVID-19 forbearances absent this rule, the net impact of this rule on small servicers is likely to be insignificant for those that choose to participate.
You can expect to receive your money back within 10 business days after you've gotten a response about your VA funding fee refund. Generally, Veterans with pre-discharge claims pending will need a proposed or memorandum rating in the loan file in order to be eligible for a funding fee refund. One of the more common is Veterans with disability claims pending at the time of their loan closing. Assistance to Veterans with VA-Guaranteed Home Loans When a VA-guaranteed home loan becomes delinquent, VA may provide supplemental servicing assistance to help cure the default.
However, commenters raised significant concerns about certain program features. Most notably, industry and consumer group commenters indicated that the COVID-VAPCP differed from the Federal Housing Administration's (FHA's) COVID-19 Standalone Partial Claim program. According to the commenters, these differences made the COVID-VAPCP less helpful to veterans and less workable for servicers. We read the general theme of the commenters' recommendations to be that VA should finalize the rule with revisions that would make the COVID-VAPCP more similar to FHA's COVID-19 Standalone Partial Claim program.
If you paid for it out of your loan proceeds, then your lender will need to refund the amount to your loan balance and submit evidence to the VA that the refund was applied. Veteran borrowers may be able to request relief pursuant to the Servicemembers Civil Relief Act . In order to qualify for certain protections available under the Act, their obligation must have originated prior to their current period of active military service.
As to the suggestion that VA should allow servicers to submit a request for up to 12 months after the national emergency ends, VA believes that the end of the veteran's forbearance period, as opposed to the end of the national emergency, is the more appropriate starting point. As mentioned above, VA believes the key is to act quickly for veterans who are exiting their COVID-19 forbearances. Moreover, VA acknowledges that servicers will be processing many cases where borrowers exit forbearance in the coming year. This upcoming influx of cases is one of the primary reasons that VA is streamlining the COVID-VAPCP process. VA believes that streamlining the process will lessen servicers' workload in evaluating, executing, and requesting a partial claim payment.
In some cases, borrowers will have a disability claim pending at the time of their loan closing. Depending on the circumstances, some borrowers will be eligible for a refund of the funding fee after closing. Veterans and military buyers who receive compensation for a service-connected disability don't have to pay this fee. Neither do surviving spouses, purple heart recipients, or Veterans rated eligible to receive disability compensation as a result of a pre-discharge exam or review.
VA expressed interest in determining whether the partial claim payment should include amounts corresponding to what will be due for such items, where the bills were not due and payable during the COVID-19 forbearance. VA also sought input regarding how best to calculate and disburse such amounts, as well as how to conduct oversight to ensure the monies were directed to the appropriate tax authority or insurance provider. In other words, while VA has not prescribed a waterfall of home retention options, in cases where the servicer determines that the partial claim option is an optimal method, the servicer should pursue it, rather than another option. This will help shield the veteran from delaying the veteran's financial recovery and help prevent the expensive and labor-intensive burdens that could be posed by an unnecessary series of home retention strategies. Comments and questions submitted by veterans, lenders, servicers, consumer groups, and trade associations were generally supportive of VA's initiative.
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