VA Finalizes New Servicing and Modification Rules
The Department of Veterans Affairs made final Friday new guidelines for servicers managing mortgages under the VA Loan Guaranty program. The majority of the changes cover default management and guaranty claims submission, and are the result of migrating to a new loan tracking platform, called the VA Loan Electronic Reporting Interface (VALERI). Among the new rules implemented with VALERI is a new attorney fee schedule that increases allowable fees for foreclosure processing, Chapter 13 releases and Chapter 7 releases; also, a new allowable fee for so-called foreclosure restarts has been introduced as well. The VA also rolled out a new foreclosure timeline series that will be used in VALERI to measure servicer/attorney performance. Servicers had earlier pushed for the VA to use the HUD Single Family Default Monitoring System (SFDMS) file layout for reporting, but the VA said doing so "was not feasible." (It's an inside joke, but you try telling the VA that if its good enough for HUD it should be good enough for you, and see where it gets you). The department did say, however, that it believed the data it was requesting via VALERI already existed in most servicing platforms. To allow for more time in loss mitigation, the VA also upped the number of days it will cover interest prior to requiring a foreclosure start -- adding 30 days to its existing 180 days from last payment rule. Read the full set of rules by clicking here.