Greetings,

VA Circular 26-23-10 – VA Assumption Updates, includes an important update to the Simple Release of Liability or Spousal Release Process.  Previously, the Department of Veterans Affairs (VA) had been part of this process, but the servicer will now complete the entirety of the release of liability/spousal release process based on the guidance in the aforementioned Circular.

Below is the verbiage from VA Circular 26-23-10 to aid servicers in the completion process:     

e. Spousal Releases: VA does not require the servicer to complete an assumption to release a spouse, whose entitlement is not encumbered by the VA-guaranteed loan, from liability to a loan if the request is made due to a decree to dissolve the marriage or a legal separation agreement awarding the property to the Veteran whose entitlement is encumbered by the VA-guaranteed loan. The servicer may proceed with the spousal release and update VALERI with the obligors as appropriate, if the Veteran or ex-spouse provides the following documentation to the servicer:

 (1) A copy of the decree to dissolve the marriage or legal separation agreement verifying the property was awarded to the Veteran whose entitlement is encumbered by the VA-guaranteed loan; and,

 (2) A recorded copy of the legal document (ex. quit claim deed) transferring ownership to the Veteran whose entitlement is encumbered by the VA-guaranteed loan.’

For questions, please contact VA at 1-877-827-3702, between the hours of 8:00 AM and 6:00 PM Eastern time.

Sincerely,

Loan Guaranty Service