VA Revises Loan Modification Guidelines; HAMP As Inspiration

Posted by Orb Staff on May 25, 2010 No Comments
Categories : Mortgage Servicing

S. Department of Veterans Affairs (VA) has issued revised instructions for modifying VA-guaranteed home loans in accordance with the Making Home Affordable (MHA) program. These new procedures are effective immediately. A notable change is the VA's new guideline providing servicers with temporary authority to modify VA-guaranteed loans in a manner similar to how Home Affordable Modification Program (HAMP) loans are handled. HAMP-style modification authority can be utilized only if the following three requirements are met: the borrower does not qualify for traditional home-retention loss mitigation; the property is the borrower's primary residence; and the VA HAMP modification is agreed upon prior to the HAMP expiration date (currently Dec. 31, 2012). While the U.S. Treasury restricts HAMP modifications to loans originated on or before Jan. 1, 2009, the VA is allowing servicers to use HAMP-style modifications on any VA-guaranteed loan, subject to the requirement that prior VA approval must be obtained if less than 12 payments have been made since the loan closed. All of the VA's new guidelines can be accessed [link=http://homeloans.va.gov/circulars/26_10_6.pdf]HERE[

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