Greetings,

This announcement provides necessary information about the Department of Veterans Affairs (VA) home loan borrowers affected by Hurricanes Helene and Milton and describes measures mortgagees may employ to provide relief. Mortgage servicers and borrowers alike should review VA’s Guidance on Natural Disasters to ensure Veterans receive the assistance they need. (https://www.benefits.va.gov/homeloans/documents/docs/va_policy_regarding_natural_disasters.pdf or https://www.benefits.va.gov/WARMS/docs/admin26/m26_04/Ch21.docx.)

Forbearance Request. VA encourages holders of guaranteed loans to extend forbearance to borrowers in distress as a result of the disaster. Careful counseling with borrowers should help determine whether their difficulties are related to this disaster, or whether they stem from other sources that must be addressed. The proper use of authorities granted in VA regulations may be of assistance in appropriate cases. For example, Title 38, Code of Federal Regulations (C.F.R.), section 36.4311 allows the reapplication of prepayments to cure or prevent a default. Also, 38 C.FR. 36.4315 allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided conditions in the regulation are satisfied.

Moratorium on Foreclosure. Although the loan holder is ultimately responsible for determining when to initiate foreclosure, and for completing termination action, VA has requested on its website (http://www.benefits.va.gov/homeloans) that holders establish a 90-day moratorium from the date of a disaster declaration on initiating new foreclosures on loans affected by major disasters. VA regulation 38 C.F.R. 36.4324(a)(3)(ii) allows additional interest on a guaranty claim when eventual termination has been delayed due to circumstances beyond the control of the holder, such as VA-requested forbearance. Due to the widespread impact of the disaster, holders should review all foreclosure referrals to ensure that borrowers have not been affected significantly enough to justify delay in referral. Any questions about the impact should be discussed with VA at 1-877-827-3702 or through the ServiceNow portal. Moratoriums for disasters are not connected with the foreclosure moratorium outlined in VA Circular 26-24-12.

Late Charge Waivers. VA encourages servicers to waive late charges on any loans that may have been affected.

Credit and VA Reporting. To avoid damaging the credit records of Veteran borrowers, servicers are encouraged to suspend credit bureau reporting on affected loans. VA will not penalize affected servicers for any late default reporting to VA as a result. Please contact VA at 1-877-827-3702 or through the ServiceNow portal with any questions.

Activation of the National Guard. Members of the National Guard may be called to active duty to assist in recovery efforts. VA encourages servicers to extend special forbearance to National Guard members who experience financial difficulties as a result of their service.

We greatly appreciate the support and commitment we have from mortgage servicers to provide relief to Veterans. We encourage both mortgage servicers and borrowers to check FEMA updates on their website here: https://www.fema.gov/disaster/declarations.

Sincerely, 

Loan Guaranty Service