VA Encourages Forbearances For Drywall Victims

Posted by Orb Staff on June 04, 2010 No Comments
Categories : Mortgage Servicing

S. Department of Veteran Affairs (VA) is strongly encouraging servicers of VA-guaranteed loans to extend forbearance for at least six months to veterans experiencing difficulties because of suspected problem Chinese drywall. Imported drywall material that was used largely in the building of homes in 2006 and 2007 has been tied to health problems and the corrosion of wiring, metal pipes and household appliances. According to a June 1 VA circular, the Consumer Product Safety Commission has received almost 3,300 reports from consumers in the District of Columbia and 37 states (primarily in Florida, Louisiana and Virginia) who believe their health symptoms or the corrosion of certain metal components in their homes is related to problem drywall. Due to the limited sources of funds currently available to remedy affected homes, VA forbearance plans may need to be extended to provide borrowers the opportunity to obtain funding and sufficient time in which to remediate the damage to their homes, the agency says. In cases where forbearance in excess of the original six months is being considered, servicers of VA-guaranteed loans may contact their VALERI-assigned VA Loan Technician for guidance. In addition to a period of forbearance, VA strongly encourages servicers to suspend derogatory credit reporting on borrowers affected by this issue and not to assess late fees during the established forbearance period. The VA circular can be viewed in its entirety [link=http://homeloans.va.gov/circulars/26_10_7.pdf ]here[/link]. SOURCE: [link=http://homeloans.va.gov/circulars/26_10_7.pdf ]Department of Veterans Affairs

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