Mitchell6024/quickb · Datasets at Hugging Face

id stringlengths 36 36	text stringlengths 1 400	source stringclasses 1 value
53c505f4-6d28-411e-9878-05708dc0a536	Lenders must upload the complete loan file in the proper stacking order to WebLGY within 15-calendar days of receiving notification from VA. The loan origination file should be uploaded as a single-file PDF into VA’s electronic loan system (WebLGY or subsequent system). If the file size exceeds VA’s limit, it is permissible to split the file, but it should still follow the stacking order.	VA_Guidelines.txt
2128c97e-b91c-4d63-8fc3-49ac54b5e0fa	The Uniform Loan Application Dataset (ULAD) and Uniform Closing Dataset (UCD) are to be uploaded as separate files, in “.xml” format only. The stacking order for FFLR of Purchase and Cash-Out Refinances is provided in Appendix B, Topic 3. The stacking order for FFLR of IRRRLs is provided in Appendix B, Topic 4.	VA_Guidelines.txt
f99b7ae2-907a-44cc-a71d-703adb61bdb2	If VA finds significant deficiencies in a loan submission, the lender will be notified. Lenders must upload a response to WebLGY within 30-calendar days of receipt of any deficiency letter requesting clarification or additional documentation.	VA_Guidelines.txt
c6fd5c37-500e-4a12-8f58-97433697b5c9	Failure to respond to VA’s requests for additional documentation can lead to non-compliance with VA guidelines which can affect a lender’s ability to maintain automatic authority. 2 38 CFR § 36	VA_Guidelines.txt
a9f5e092-2fa0-48f1-9fd4-4faad9def6ba	. 2 38 CFR § 36.4333 5-16 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan Change Date: April 1, 2019 · This chapter has been revised in its entirety. a.	VA_Guidelines.txt
ae3f546b-6674-49d0-82f5-047e11172149	General Information If you are not the loan servicer or holder of the current VA loan, please refer the borrower or purchaser to the servicer or holder of the current VA loan for processing. Assumptions can only be processed and closed by loan holders and services with VA automatic authority that are holding or servicing the current VA loan.	VA_Guidelines.txt
f30f3b37-2f8f-409e-8ac9-209653005acb	Loan holders or servicers holding the loan without VA automatic authority that are holding or servicing the current VA loan, may submit a prior approval package to the VA RLC of jurisdiction of where the property is located. See Topic 1 of this chapter. A VA assumption is also considered a Release of Liability (ROL).	VA_Guidelines.txt
73e19456-3d0e-479c-8978-ca8f447e0f14	Properties that are security for VA-guaranteed loans may be disposed or transferred even though the loans are not paid in full.	VA_Guidelines.txt
d83aec6c-1976-4a21-9f44-8f8eba4a2ad4	Veterans who dispose or transfer their properties under these conditions remain liable to VA for any loss that may occur as a result of a future default and subsequent claim payment, unless the property is transferred to a creditworthy purchaser who agrees to assume the payment obligation. The servicer initially determines the purchaser’s creditworthiness.	VA_Guidelines.txt
b9f8018c-de41-4d17-bbd6-58f919386f44	Any purchaser may qualify to assume a VA loan; however, for a Veteran’s entitlement to be restored, a Veteran purchaser with sufficient entitlement must complete a Substitution of Entitlement (SOE) when the ROL is closed.	VA_Guidelines.txt
cba82278-f724-4a43-85d1-52cd32cd2eef	The Veteran’s entitlement is not restored unless the Veteran purchaser, in addition to assuming the payment obligation, also agrees and is eligible to substitute their entitlement for the Veteran seller’s entitlement.	VA_Guidelines.txt
3012033a-3578-45f1-af4e-2400e945fde0	It is important for the servicer as soon as possible in the assumption process to obtain COEs for both the Veteran assumer and Veteran seller to determine if there is sufficient entitlement in which to substitute. See chapter 3 of this handbook. Unless the ROL is an unrestricted transfer, a closing disclosure is required. An ROL or SOE does not affect the original issuance of the LGC. b.	VA_Guidelines.txt
97fe814c-3483-4953-95ca-c8231f09e473	Who Can Process Loan Assumptions?	VA_Guidelines.txt
422deb6e-b1df-47b3-968c-afb75cccdcd2	While procedures for processing requests for assumption approvals previously depended on the date of loan (commitment made on or after March 1, 1988), the VA Loan Electronic Reporting Interface (VALERI) regulations authorize loan holders or servicers with automatic authority that are holding or servicing the current VA loan to be transferred to determine creditworthiness on all assumption	VA_Guidelines.txt
7790c768-67fa-481e-a053-372679401d66	to determine creditworthiness on all assumption approval requests processed by their servicers	VA_Guidelines.txt
ad7c2926-3b1c-440f-a34e-d230fdba8be6	.	VA_Guidelines.txt
d5578c84-e104-4137-a6ce-c51d14e4bb71	Continued on next page 5-17 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued c. Servicers with Automatic Authority Servicers with automatic authority are authorized to process and determine creditworthiness on assumption approval requests on behalf of VA.	VA_Guidelines.txt
12d3c5c2-d721-4a5a-a110-6d3de1756328	Servicers must follow VA underwriting guidelines (see chapter 4 of this handbook) when processing and determining creditworthiness on these cases. Servicers must notify VA electronically of authorized ownership transfers and approved ROLs in VALERI. Additional information on the reporting process is available online at http://www.benefits.va.gov/homeloans/valeri.asp.	VA_Guidelines.txt
5e1c326d-4895-4c63-94f9-46a82e497b1d	An underwriting and closing package must be uploaded into WebLGY, for the existing VA loan number. d. Servicers without Automatic Authority Servicers without automatic authority that are servicing loans for holders with automatic authority must advise the holders of any assumption approval requests, and the holders will be responsible for determining creditworthiness.	VA_Guidelines.txt
0d693795-2b7b-4422-be40-2a3fe7b16415	When neither the servicer nor the holder has automatic authority, the servicer must develop a complete credit package and submit it, along with a copy of the purchase contract and the status of the loan to the Loan Production section at the VA RLC where the property is located.	VA_Guidelines.txt
a600617e-e499-4254-b9e7-587e537decd7	The package should contain a cover letter indicating prior approval underwriting is required as both the servicer and the holder do not have VA automatic authority. See Topic 4, subsection c, of this chapter for the stacking order. e.	VA_Guidelines.txt
742cfc3b-0a2f-4c58-8a3a-7d0f2aaa6bf2	Transfers of Ownership on Properties with Loan Commitments after March 1, 1988 Transfers of ownership on properties securing loans for which commitments were made on or after March 1, 1988, must have the prior approval of the loan holder or its authorized servicing agent if either of them have automatic authority.	VA_Guidelines.txt
4cfaf266-0246-4372-a66d-0db5d73b2699	If neither the holder nor the servicer has automatic authority, the servicer must submit a credit package to VA for underwriting. A seller must apply for approval of the transfer prior to completing the sale. Servicers and holders with automatic authority must examine the application to assess compliance with the provisions of 38 U. S. C. 3714.	VA_Guidelines.txt
13d8670e-b1ea-4912-920f-4364a0450973	S. C. 3714. VA will make the determination in a case where neither the servicer nor the holder has automatic authority, following receipt of a complete application package from the servicer or holder.	VA_Guidelines.txt
3e785682-9795-47a1-896e-7879700005cc	Continued on next page 5-18 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued f.	VA_Guidelines.txt
92424ca1-a156-4d64-b101-3910ba737b5b	Approval Requirements To approve the transfer of ownership: · the loan must be current or will be brought current at the closing of the sales transaction, · the prospective purchaser of the property is creditworthy, as determined in accordance with 38 C. F.	VA_Guidelines.txt
c2cfd467-2620-4316-8bea-840f0e029ff0	F. R. 36.4340 and Chapter 4 of the Lender’s Handbook, and · the prospective purchaser has agreed to assume all of the loan obligations, including the obligation to indemnify VA if a claim is paid. A processing fee may be collected in advance, including a reasonable estimate for the cost of the credit report.	VA_Guidelines.txt
bd0d6154-87ae-49b1-bd27-f32c464af86e	The maximum fee for processing a request for assumption approval and changing the loan records is the lesser of: · automatic authority – $300 plus the actual cost of a credit report; or · no automatic authority – $250 plus the actual cost of a credit report; or · any maximum prescribed by applicable state law. VA does not specifically regulate when the processing fee may be assessed.	VA_Guidelines.txt
31ccf1c2-759d-4fa3-8ece-2f70d355e3e1	However, when the processing fee is collected prior to signing the sales contract, the portion of the fee attributable to changing the servicer’s records (usually $50) must be returned to the seller if the application is denied or the process is not completed. Therefore, VA recommends that the processing charge accompany the complete package. g.	VA_Guidelines.txt
e6592296-1439-4734-96e5-843e5153e9d7	Processing Time Guidelines Automatic Authority: Servicers or holders with automatic authority must complete the underwriting and notify the seller of the decision within 30 calendar days after receiving a complete ownership transfer approval application package.	VA_Guidelines.txt
3230ca2c-9bc7-4fe2-ae44-d85e82ce5d8a	Without Automatic Authority: Servicers without automatic authority (where the holder also does not have automatic authority) must submit documents to VA within 21 days after receiving a complete application package. VA Review: VA has 10 business days to complete its underwriting review and notify the servicer of its decision. Servicers have 7-calendar days to notify all parties of VA’s decision.	VA_Guidelines.txt
91740f84-6e6b-476f-81d8-f784d57c591d	Continued on next page 5-19 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued h.	VA_Guidelines.txt
3b70124b-d923-4d6e-978d-7c796080030a	Decision Notices Approvals: If the application for ownership transfer is approved, the servicer must notify the seller and include instructions for the assumption of liability by the purchaser, the amount of funding fee that must be paid, and documentation needed to complete the process. Disapprovals: If the application is disapproved, the seller and purchaser must be notified.	VA_Guidelines.txt
e86dab1c-d2de-42d8-ae31-b05fcf36badb	The disapproval notice must include: · the reason(s) for the decision and a notice that the decision may be appealed to VA within 30 calendar days, · contact information of the servicer including address, phone number, and e-mail of the servicer for VA to request the underwriting package if appealed, · if the application was disapproved for credit reasons, the purchaser must be informed of the	VA_Guidelines.txt
ad4c3f14-b87d-48f0-aee4-fdd0ea755ef2	reasons, the purchaser must be informed of the basis on which the adverse decision was made in accordance with the Fair Credit Reporting Act	VA_Guidelines.txt
d54af43c-81ae-43a5-bfbc-f2d0df5ff8b3	.	VA_Guidelines.txt
b3fd99c2-2200-4242-9f14-1e27159409ac	If the application remains disapproved after 45 calendar days (to allow time for an appeal and review by VA), the $50 fee for changing the account records, if previously collected, must be refunded. i.	VA_Guidelines.txt
a4236717-6bbf-4981-abb0-698054780ee6	VA Appeals The seller or the purchaser may appeal a disapproval decision to the VA RLC with jurisdiction over where the property is located within 30 calendar days from the notification of disapproval. When the VA RLC receives an appeal of a denied request, VA will request that the servicer send a copy of the application package used in making the decision.	VA_Guidelines.txt
6923c08b-2f86-4e1f-8e32-0992feac57ec	The loan package must be provided to the VA office of jurisdiction of where the property is located within 7 calendar days. The VA RLC of jurisdiction of where the property is located will review and either approve the assumption on appeal or uphold the decision to deny the application.	VA_Guidelines.txt
8e3733ee-2002-4d16-ad4f-1f329c27a405	If approved, the servicer should close the assumption within 30 calendar days of VA’s approval and submit a closing package to the VA RLC of jurisdiction of where the property is located. If the appeal is not approved, VA’s notice will advise the seller of the right to request a special approval within 15 calendar days of receipt of the disapproval notice.	VA_Guidelines.txt
b5e71e56-ffc7-4141-867c-cd75eeedc225	Special Approval: Following an appeal to VA, the seller may request special approval within 15 calendar days of receipt of the disapproval notice. Continued on next page 5-20 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued i.	VA_Guidelines.txt
33427586-826b-485a-8140-19e50bf262bc	VA Appeals, continued VA’s special approval does not release any obligor from liability.	VA_Guidelines.txt
78fdde1a-d0db-47cb-a463-cf2f3c52fd1d	VA may determine that special approval of the assumption is in the best interest of the government if: · the seller agrees to remain secondarily liable on the loan following assumption, · the seller is unable to otherwise continue payments on the loan, and reasonable efforts have been made to find a creditworthy borrower for the property, or · if an obligor is released without proper approval, VA	VA_Guidelines.txt
a79560a6-e6e7-44ab-8d72-38119335b290	obligor is released without proper approval, VA may be released from further liability on the guaranty	VA_Guidelines.txt
2bbae5da-262f-400a-af67-87fa7356c526	.	VA_Guidelines.txt
614904df-1602-4422-bcea-21be3a547053	VA has 7 calendar days from receipt of the seller’s request to make this determination. If approved, the VA RLC will notify the servicer and seller that the assumption has been approved and that the seller will not be released from liability to VA; however, the property can be transferred to the purchaser(s). The servicer should close the assumption with 30 days of VA’s special approval.	VA_Guidelines.txt
6ff89365-a1bb-4bce-b07b-4e0d5143d43c	If disapproved, the VA RLC will notify the seller and lender that the assumption has not been approved, that the seller will not be released from liability, and the property cannot be transferred. j. Steps After Approval Once approved, the servicer will complete the transfer with a loan closing that meets all federal and any state and local regulations and requirements. k.	VA_Guidelines.txt
3e33ded6-af95-43f0-8419-d5154eafa450	Assumption Clause The VA-approved assumption clause must be included in the deed conveying the property to the purchaser. The VA RLC of jurisdiction of where the property is located has an example(s) of assumption clauses that are both acceptable to VA and compliant with state and local requirements.	VA_Guidelines.txt
6dcbbc96-0746-4faa-a04c-6024ba6587e7	Servicers should contact the RLC of jurisdiction of where the property is located to obtain sample language and/or documents. The servicer is responsible for reviewing the document to establish that it contains the approved assumption clause and recording data and that it has the legal effect intended.	VA_Guidelines.txt
32f0117e-ba79-4148-9562-2dcf5d74ddef	Continued on next page 5-21 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued l. Agreement Creating Liability If the seller and purchaser have satisfied all the requirements of 38 U. S.	VA_Guidelines.txt
5f32afa2-4918-444e-b8d8-a7b5849518e0	S. C. 3714(a)(1), but the transfer deed containing an acceptable assumption clause was not included, the servicer must prepare an “Agreement Creating Liability to Holder and to United States” to execute the release. The servicer must prepare an Agreement Creating Liability to Holder and to “United States” to execute the release.	VA_Guidelines.txt
aa2ca38e-b2f2-429b-9bde-685ea8550686	Three copies are needed for execution and must be signed by the: · seller, · purchaser, and · servicer as agent for the Department of Veteran Affairs. The VA RLC of jurisdiction of where the property is located has examples of agreements that are both acceptable to VA and compliant with state and local requirements.	VA_Guidelines.txt
0a6d68d1-cd03-4fcb-85af-18a52d25769b	Servicers should contact the VA RLC of jurisdiction of where the property is located to obtain sample language and/or documents. Once received, the servicer is responsible for reviewing the document to establish that it was properly completed and that it has the legal effect intended. The holder or its authorized servicing agent will then execute the release portion of the form.	VA_Guidelines.txt
67488955-ff42-4d56-9093-5960c7b24c1a	In those states where recording the assumption and/or the release instrument is necessary, the Veteran may be asked to pay the recording fees. m. Funding Fee At loan transfer, the purchaser is required to pay a funding fee to the servicer equal to one- half of one percent of the loan balance as of the date of transfer.	VA_Guidelines.txt
4925b271-aeba-49a3-bfdf-c9a9fbe2211e	See Chapter 8 of this handbook for information on other exemptions from the funding fee and how to verify exemption status. When the transfer is a result of an unrestricted transfer, a funding fee is not required. The fee must be paid to VA within 15 calendar days of the date of assumption using the VA Funding Fee Payment System – VA FFPS .	VA_Guidelines.txt
29be5a61-81ee-4ce8-bf3a-2930409db5e7	The VA funding fee cannot be financed into the loan being assumed. It must be paid in cash at the time of transfer. n. Notification to VA Servicers must notify VA after ownership has been transferred and release of liability has been granted. Additional information can be found at: http://www.benefits.va.gov/homeloans/valeri.asp.	VA_Guidelines.txt
0cd321fc-a598-468f-8d77-9776c3a39363	Continued on next page 5-22 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued n.	VA_Guidelines.txt
57fa5b4c-b7af-4eb4-9eda-50a00027860c	Notification to VA, continued, Servicers must also submit a completed closing package to the VA RLC of jurisdiction of the property after ownership has been transferred and an ROL has been granted.	VA_Guidelines.txt
9715f51b-49d9-49b1-a972-2e19dddc3811	The package should contain documentation in the following stacking order: Table 3: Assumption Stacking Order Order Document 1 Lender’s cover or transmittal letter, including the reason for submission	VA_Guidelines.txt
bc7913ae-8af6-4df3-b474-2f0593959849	. 2 If Substitution of Entitlement, then Certificate of Eligibility for both Veteran seller and assumer and signed VA Form 26-8106, Statement of Veteran Assuming GI Loan 3 Copy of quit claim deed or other recorded document with transfer of ownership with VA clause or if not included, signed assumption agreement by all parties (seller, assumer, and servicer/holder) 4 Evidence loan current and the	VA_Guidelines.txt
1e4cd965-588e-4d48-9a81-9f50e972f0dc	servicer/holder) 4 Evidence loan current and the time of the transfer 5 VA Form 26-8937, Verification of VA Benefits (if applicable) 6 URLA with revised VA Form 26-1802a, Department of Housing and Urban Development (HUD)/VA Addendum to URLA	VA_Guidelines.txt
dd7e6f53-8cdb-45e6-ad5e-370dc054fbd2	.	VA_Guidelines.txt
19127bfb-83b4-4365-b6de-1c566bb2c194	These final forms must be properly completed and legible.	VA_Guidelines.txt
194bbe61-061c-42db-9952-eca270fc8ed8	Forms may be signed and dated anytime from the date of initial application to the date of loan closing. 7 Closing Disclosure Statement (CD) 8 VA Form 26-8497, Request for Verification of Employment or alternative verification of employment (VOE), and other verifications of income such as pay stubs and tax returns	VA_Guidelines.txt
f855c0b7-3014-46fc-996e-ad8bcf07c549	. 9 CAIVRS, borrower/co-borrower 10 All credit reports obtained in connection with the loan and any related documentation such as explanations for adverse credit, if required	VA_Guidelines.txt
3595e398-3ffe-4275-90a6-bafeffb9496b	. 11 VA Form 26-8497a, Request for Verification of Deposit or alternative VOD, and other related documents 12 For automated underwriting cases: feedback certificate and underwriter’s certification 13 VA Form 26-6393, Loan Analysis, completed and legibly signed 14 If a loan is submitted more than 60 days after loan closing, a statement signed by a corporate officer of the lender that identifies the	VA_Guidelines.txt
f88b6462-3ae0-4c04-ab8e-06c18276c95d	officer of the lender that identifies the loan, provides the specific reasons for late reporting and certifies that the loan is current	VA_Guidelines.txt
38ee13c5-687c-4578-a159-3452b78a24e6	. 15 VA Form 26-0592, Counseling Checklist for Military Homebuyers, if the applicant is on active duty Continued on next page 5-23 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued n.	VA_Guidelines.txt
bcdf4774-791e-4a51-a9eb-30f5d40a7940	Notification to VA, continued, Table 3: Assumption Stacking Order, continued Order Document 16 Purchase/Assumption/earnest money contract 17 Other necessary documents (for example – but not limited to, a POA if used, lenders loan quality certification) 18 Copt of the original note and all riders Servicers are required to retain the supporting documentation for all transfers, assumptions, and an	VA_Guidelines.txt
824806c8-ee31-4b72-962f-a1cfe5412612	for all transfers, assumptions, and an ROL for at least 3 years from approval or denial	VA_Guidelines.txt
21b967e5-d93a-4bec-9960-03eef565df7e	. o.	VA_Guidelines.txt
19318a68-baa8-4ef5-8efe-9dff6ddb4f14	Assumptions without Prior Approval Servicers must notify VA’s Loan Production Department at the RLC of jurisdiction of where the property is located (in addition to the VALERI system) within 60 days after learning of a transfer that did not receive prior approval by the servicer or VA.	VA_Guidelines.txt
584802b8-045b-496e-ae58-592aae7e6db0	The notice must advise VA whether the servicer intends to exercise the option to immediately refer the case to foreclosure or to give the transferor and transferee the opportunity to apply for “retroactive approval” of the assumption.	VA_Guidelines.txt
a15bdf31-d9b2-4303-af50-8c011392076c	Upon learning of an unapproved transfer, the servicer may decide to demand immediate payment of the one-half of one percent VA funding fee and request a copy of the instrument of transfer to determine the liability of the purchaser. Loans for which a commitment was made prior to March 1, 1988, are commonly known as freely assumable loans.	VA_Guidelines.txt
9911b208-2e30-4022-a416-3383a3eb4ff3	Owners have the right to sell the property securing these loans under any terms; servicers may not impose a restriction, charge, or fee that would limit or nullify this right. A funding fee is not assessed on assumptions of loans where the commitment was made prior to March 1, 1988. Liability assumed.	VA_Guidelines.txt
707ad747-93e8-4fc2-aaaa-890133214e17	Liability assumed. The purchaser should be afforded an opportunity for retroactive approval of the transfer if: · the purchaser pays the funding fee, · the purchaser has assumed all of the seller’s obligations in the transfer deed, · the assumption language is legally binding, and · it appears that the purchaser intends to satisfy those obligations.	VA_Guidelines.txt
957b0138-af6b-4e8c-914c-c03fa4fcb418	When these conditions have been met, then the Veteran and transferee must specifically apply for an ROL under 38 U. S. C. 3713. See subsection a of this topic. An ROL does not restore the original Veteran’s VA home loan entitlement and does not affect the guaranty on the loan.	VA_Guidelines.txt
393ca669-b095-4d06-80b6-db07b3b19569	Continued on next page 5-24 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued o.	VA_Guidelines.txt
4a2826d4-3122-4ee3-aa40-ac2439d4d5b2	Assumptions without Prior Approval, continued After the completion of an ROL, a Veteran purchaser can apply for a Substitution of Entitlement to restore the Veteran seller’s entitlement (see subsection r of this topic). Liability not assumed.	VA_Guidelines.txt
c56d3587-60d7-4b3b-968d-ed1f9ef2953e	Liability not assumed. If prior approval of a transfer was not obtained and the title was transferred “subject to” the mortgage or deed of trust, then the purchaser usually has no liability on the loan and no liability for the funding fee. In this instance, the purchaser may have no incentive to maintain the payments.	VA_Guidelines.txt
c8377645-f0f3-413e-9c49-08e025cbe6af	The original Veteran seller is still liable if the home subsequently defaults and VA pays a claim based on the Veteran’s entitlement used to guaranty the loan. It may still be advisable to extend the opportunity to apply for retroactive approval of the transfer, with the expectation that the purchaser will assume liability for repayment of the loan.	VA_Guidelines.txt
1676cde0-bbb8-45c4-9f83-7e39797b89df	The original mortgagor remains liable on the loan unless he or she is released from personal liability with a qualifying assumption. The Veteran and transferee must specifically apply for an ROL under 38 U. S. C. 3713. See subsection a of this topic. An ROL does not restore the original Veteran’s VA home loan entitlement and does not affect the guaranty on the loan.	VA_Guidelines.txt
9d3f8ced-4f3d-4cdf-8d20-da7680044ac0	The LGC remains in the original Veteran’s name. After the completion of an ROL, a Veteran purchaser can apply for an SOE to restore the Veteran seller’s entitlement. See subsection r of this topic.	VA_Guidelines.txt
9b2b6afb-1e1a-4822-9c7f-b43d4912b76f	See subsection r of this topic. An exception applies when the loan was made by a state, territorial, or local governmental agency and the law requires acceleration of the maturity of the loan upon sale or transfer of the property to a person not eligible for assistance under the special program.	VA_Guidelines.txt
dbf9ccc0-479f-4f24-be97-870d5af5aea8	VA has approved due-on-sale clauses to allow Veterans to participate in these programs and take advantage of below-market interest rates and benefits. Process for Retroactive Approval. If the Veteran and current owner will be permitted to apply for retroactive approval, the assumption process should be completed in the same manner as if the application had been received prior to the transfer.	VA_Guidelines.txt
2e809eca-e9b1-4f80-8780-3b14462d5816	This includes the right of appeal to VA, if the request is denied. Should a purchaser fail to cooperate in the retroactive approval process, a servicer has the option of accelerating the loan.	VA_Guidelines.txt
df4c52a0-1a23-4377-90be-507f74e3f27d	When making this decision, the servicer should consider the implications of state law when delaying acceleration as compared to the prospect of accelerating a current loan that has the potential for future timely payments. Any decision must be reported to the VA RLC of jurisdiction of the property and in VALERI.	VA_Guidelines.txt
e0afaf5f-99aa-453b-9bf5-f112dc332ffb	Continued on next page 5-25 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued p.	VA_Guidelines.txt
c08335ee-341b-40a1-a33d-af309d940720	General Release of Liability Procedures VA-guaranteed loans dated prior to March 1, 1988, can be transferred without VA’s prior approval, borrowers and transferees may apply for an ROL before or after the closing of the transaction. Servicers with automatic authority must process an ROL when the borrower and transferee specifically apply for a release.	VA_Guidelines.txt
883fe122-8396-445f-91b2-a1708c5ac514	Servicers without automatic authority that are servicing loans for holders with automatic authority must advise the holders of any assumption approval requests, and the holders will be responsible for determining creditworthiness. A processing charge may be assessed for reviewing a request for an ROL just as on a request for approval of ownership change on a later loan.	VA_Guidelines.txt
f30941ae-0124-4f31-a17c-ae8f06ac8dda	When a borrower sells his or her home to transfer ownership without requesting an ROL, the servicer may charge up to $50 for amending its records to reflect a change in ownership, if the parties involved agree and it is permissible under the loan agreement. No funding fee may be assessed on assumptions of loans where the commitment was made prior to March 1, 1988. q.	VA_Guidelines.txt
787e1ace-3f11-480a-bed2-2a1f17a7cdb7	Release of Liability Procedures for Divorce A Veteran may seek release from personal liability when his or her former spouse acquires the property as the outcome of a legally binding separation agreement or divorce proceedings and the ex-spouse was jointly liable on the loan with the Veteran prior to the divorce.	VA_Guidelines.txt
e8bb3231-75ec-4d60-bbf4-459b7432ceb1	Servicers may process requests for an ROL from divorced Veterans using the same general procedures outlined in subsection a of this topic. When processing an ROL in divorce cases in which the Veteran’s former spouse receives the property, the servicer is authorized to charge the normal processing fee to complete the credit underwriting. A funding fee may not be assessed.	VA_Guidelines.txt
868b8930-d2af-4219-8ec3-37c4d332b7f0	The following requirements must be met: · the divorce is final and absolute and it is determined no appeal will be taken, or · a signed separation agreement by all parties based on local laws and available documents with reasons why a separation agreement is used in lieu of a final decree of divorce, and · the entire estate encumbered for the VA-guaranteed loan has become vested in the name of	VA_Guidelines.txt
fc2a593b-9641-4f5e-8941-1afb3e93fbb8	loan has become vested in the name of the Veteran’s former spouse, and · there is not any knowledge of any property settlement that would make the Veteran liable between the parties to pay the guaranteed loan	VA_Guidelines.txt
bcfb2974-76bd-46f4-9817-f03a43381cf5	.	VA_Guidelines.txt
5a3f811c-b2a6-4a8d-bdb3-f8733974da37	Continued on next page 5-26 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued q. Release of Liability Procedures for Divorce, continued Some states require a specific amount of time between a legal separation and a divorce (up to one year).	VA_Guidelines.txt
8b478c41-a71a-4c97-ad61-8cfa35d4f893	With proper documentation, do not delay the request for an ROL, if the divorce is not final, but a legal separation agreement is in effect. In some instances, the ex-spouse may also be a Veteran; however, for VA purposes, only the applicant who used their entitlement to guaranty the loan is considered a Veteran.	VA_Guidelines.txt
b1727ddf-f8a2-4593-aea5-458bb47d57e2	For example, John and Mary Doe are divorcing and both have obtained a COE; however, only John’s COE was used to guarantee the loan. Since Mary’s COE was not used to guarantee the home, only John is considered the Veteran. If Mary wishes to assume the loan, a credit qualifying package is required for an ROL and Mary can substitute her entitlement with the assumption.	VA_Guidelines.txt
ae49bee5-9438-4c98-bdb2-e6f89be22fc2	When the Veteran is awarded the property, the ex-spouse may seek an ROL. Requests for an ROL from an ex-spouse in cases where the Veteran retains the property should be referred to the VA RLC of jurisdiction over the state where the property is located, to process a Non-Veteran Spouse (NVS) ROL.	VA_Guidelines.txt

53c505f4-6d28-411e-9878-05708dc0a536

Lenders must upload the complete loan file in the proper stacking order to WebLGY within 15-calendar days of receiving notification from VA. The loan origination file should be uploaded as a single-file PDF into VA’s electronic loan system (WebLGY or subsequent system). If the file size exceeds VA’s limit, it is permissible to split the file, but it should still follow the stacking order.

VA_Guidelines.txt

2128c97e-b91c-4d63-8fc3-49ac54b5e0fa

The Uniform Loan Application Dataset (ULAD) and Uniform Closing Dataset (UCD) are to be uploaded as separate files, in “.xml” format only. The stacking order for FFLR of Purchase and Cash-Out Refinances is provided in Appendix B, Topic 3. The stacking order for FFLR of IRRRLs is provided in Appendix B, Topic 4.

VA_Guidelines.txt

f99b7ae2-907a-44cc-a71d-703adb61bdb2

If VA finds significant deficiencies in a loan submission, the lender will be notified. Lenders must upload a response to WebLGY within 30-calendar days of receipt of any deficiency letter requesting clarification or additional documentation.

VA_Guidelines.txt

c6fd5c37-500e-4a12-8f58-97433697b5c9

Failure to respond to VA’s requests for additional documentation can lead to non-compliance with VA guidelines which can affect a lender’s ability to maintain automatic authority. 2 38 CFR § 36

VA_Guidelines.txt

a9f5e092-2fa0-48f1-9fd4-4faad9def6ba

. 2 38 CFR § 36.4333 5-16 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan Change Date: April 1, 2019 · This chapter has been revised in its entirety. a.

VA_Guidelines.txt

ae3f546b-6674-49d0-82f5-047e11172149

General Information If you are not the loan servicer or holder of the current VA loan, please refer the borrower or purchaser to the servicer or holder of the current VA loan for processing. Assumptions can only be processed and closed by loan holders and services with VA automatic authority that are holding or servicing the current VA loan.

VA_Guidelines.txt

f30f3b37-2f8f-409e-8ac9-209653005acb

Loan holders or servicers holding the loan without VA automatic authority that are holding or servicing the current VA loan, may submit a prior approval package to the VA RLC of jurisdiction of where the property is located. See Topic 1 of this chapter. A VA assumption is also considered a Release of Liability (ROL).

VA_Guidelines.txt

73e19456-3d0e-479c-8978-ca8f447e0f14

Properties that are security for VA-guaranteed loans may be disposed or transferred even though the loans are not paid in full.

VA_Guidelines.txt

d83aec6c-1976-4a21-9f44-8f8eba4a2ad4

Veterans who dispose or transfer their properties under these conditions remain liable to VA for any loss that may occur as a result of a future default and subsequent claim payment, unless the property is transferred to a creditworthy purchaser who agrees to assume the payment obligation. The servicer initially determines the purchaser’s creditworthiness.

VA_Guidelines.txt

b9f8018c-de41-4d17-bbd6-58f919386f44

Any purchaser may qualify to assume a VA loan; however, for a Veteran’s entitlement to be restored, a Veteran purchaser with sufficient entitlement must complete a Substitution of Entitlement (SOE) when the ROL is closed.

VA_Guidelines.txt

cba82278-f724-4a43-85d1-52cd32cd2eef

The Veteran’s entitlement is not restored unless the Veteran purchaser, in addition to assuming the payment obligation, also agrees and is eligible to substitute their entitlement for the Veteran seller’s entitlement.

VA_Guidelines.txt

3012033a-3578-45f1-af4e-2400e945fde0

It is important for the servicer as soon as possible in the assumption process to obtain COEs for both the Veteran assumer and Veteran seller to determine if there is sufficient entitlement in which to substitute. See chapter 3 of this handbook. Unless the ROL is an unrestricted transfer, a closing disclosure is required. An ROL or SOE does not affect the original issuance of the LGC. b.

VA_Guidelines.txt

97fe814c-3483-4953-95ca-c8231f09e473

Who Can Process Loan Assumptions?

VA_Guidelines.txt

422deb6e-b1df-47b3-968c-afb75cccdcd2

While procedures for processing requests for assumption approvals previously depended on the date of loan (commitment made on or after March 1, 1988), the VA Loan Electronic Reporting Interface (VALERI) regulations authorize loan holders or servicers with automatic authority that are holding or servicing the current VA loan to be transferred to determine creditworthiness on all assumption

VA_Guidelines.txt

7790c768-67fa-481e-a053-372679401d66

to determine creditworthiness on all assumption approval requests processed by their servicers

VA_Guidelines.txt

ad7c2926-3b1c-440f-a34e-d230fdba8be6

.

VA_Guidelines.txt

d5578c84-e104-4137-a6ce-c51d14e4bb71

Continued on next page 5-17 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued c. Servicers with Automatic Authority Servicers with automatic authority are authorized to process and determine creditworthiness on assumption approval requests on behalf of VA.

VA_Guidelines.txt

12d3c5c2-d721-4a5a-a110-6d3de1756328

Servicers must follow VA underwriting guidelines (see chapter 4 of this handbook) when processing and determining creditworthiness on these cases. Servicers must notify VA electronically of authorized ownership transfers and approved ROLs in VALERI. Additional information on the reporting process is available online at http://www.benefits.va.gov/homeloans/valeri.asp.

VA_Guidelines.txt

5e1c326d-4895-4c63-94f9-46a82e497b1d

An underwriting and closing package must be uploaded into WebLGY, for the existing VA loan number. d. Servicers without Automatic Authority Servicers without automatic authority that are servicing loans for holders with automatic authority must advise the holders of any assumption approval requests, and the holders will be responsible for determining creditworthiness.

VA_Guidelines.txt

0d693795-2b7b-4422-be40-2a3fe7b16415

When neither the servicer nor the holder has automatic authority, the servicer must develop a complete credit package and submit it, along with a copy of the purchase contract and the status of the loan to the Loan Production section at the VA RLC where the property is located.

VA_Guidelines.txt

a600617e-e499-4254-b9e7-587e537decd7

The package should contain a cover letter indicating prior approval underwriting is required as both the servicer and the holder do not have VA automatic authority. See Topic 4, subsection c, of this chapter for the stacking order. e.

VA_Guidelines.txt

742cfc3b-0a2f-4c58-8a3a-7d0f2aaa6bf2

Transfers of Ownership on Properties with Loan Commitments after March 1, 1988 Transfers of ownership on properties securing loans for which commitments were made on or after March 1, 1988, must have the prior approval of the loan holder or its authorized servicing agent if either of them have automatic authority.

VA_Guidelines.txt

4cfaf266-0246-4372-a66d-0db5d73b2699

If neither the holder nor the servicer has automatic authority, the servicer must submit a credit package to VA for underwriting. A seller must apply for approval of the transfer prior to completing the sale. Servicers and holders with automatic authority must examine the application to assess compliance with the provisions of 38 U. S. C. 3714.

VA_Guidelines.txt

13d8670e-b1ea-4912-920f-4364a0450973

S. C. 3714. VA will make the determination in a case where neither the servicer nor the holder has automatic authority, following receipt of a complete application package from the servicer or holder.

VA_Guidelines.txt

3e785682-9795-47a1-896e-7879700005cc

Continued on next page 5-18 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued f.

VA_Guidelines.txt

92424ca1-a156-4d64-b101-3910ba737b5b

Approval Requirements To approve the transfer of ownership: · the loan must be current or will be brought current at the closing of the sales transaction, · the prospective purchaser of the property is creditworthy, as determined in accordance with 38 C. F.

VA_Guidelines.txt

c2cfd467-2620-4316-8bea-840f0e029ff0

F. R. 36.4340 and Chapter 4 of the Lender’s Handbook, and · the prospective purchaser has agreed to assume all of the loan obligations, including the obligation to indemnify VA if a claim is paid. A processing fee may be collected in advance, including a reasonable estimate for the cost of the credit report.

VA_Guidelines.txt

bd0d6154-87ae-49b1-bd27-f32c464af86e

The maximum fee for processing a request for assumption approval and changing the loan records is the lesser of: · automatic authority – $300 plus the actual cost of a credit report; or · no automatic authority – $250 plus the actual cost of a credit report; or · any maximum prescribed by applicable state law. VA does not specifically regulate when the processing fee may be assessed.

VA_Guidelines.txt

31ccf1c2-759d-4fa3-8ece-2f70d355e3e1

However, when the processing fee is collected prior to signing the sales contract, the portion of the fee attributable to changing the servicer’s records (usually $50) must be returned to the seller if the application is denied or the process is not completed. Therefore, VA recommends that the processing charge accompany the complete package. g.

VA_Guidelines.txt

e6592296-1439-4734-96e5-843e5153e9d7

Processing Time Guidelines Automatic Authority: Servicers or holders with automatic authority must complete the underwriting and notify the seller of the decision within 30 calendar days after receiving a complete ownership transfer approval application package.

VA_Guidelines.txt

3230ca2c-9bc7-4fe2-ae44-d85e82ce5d8a

Without Automatic Authority: Servicers without automatic authority (where the holder also does not have automatic authority) must submit documents to VA within 21 days after receiving a complete application package. VA Review: VA has 10 business days to complete its underwriting review and notify the servicer of its decision. Servicers have 7-calendar days to notify all parties of VA’s decision.

VA_Guidelines.txt

91740f84-6e6b-476f-81d8-f784d57c591d

Continued on next page 5-19 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued h.

VA_Guidelines.txt

3b70124b-d923-4d6e-978d-7c796080030a

Decision Notices Approvals: If the application for ownership transfer is approved, the servicer must notify the seller and include instructions for the assumption of liability by the purchaser, the amount of funding fee that must be paid, and documentation needed to complete the process. Disapprovals: If the application is disapproved, the seller and purchaser must be notified.

VA_Guidelines.txt

e86dab1c-d2de-42d8-ae31-b05fcf36badb

The disapproval notice must include: · the reason(s) for the decision and a notice that the decision may be appealed to VA within 30 calendar days, · contact information of the servicer including address, phone number, and e-mail of the servicer for VA to request the underwriting package if appealed, · if the application was disapproved for credit reasons, the purchaser must be informed of the

VA_Guidelines.txt

ad4c3f14-b87d-48f0-aee4-fdd0ea755ef2

reasons, the purchaser must be informed of the basis on which the adverse decision was made in accordance with the Fair Credit Reporting Act

VA_Guidelines.txt

d54af43c-81ae-43a5-bfbc-f2d0df5ff8b3

.

VA_Guidelines.txt

b3fd99c2-2200-4242-9f14-1e27159409ac

If the application remains disapproved after 45 calendar days (to allow time for an appeal and review by VA), the $50 fee for changing the account records, if previously collected, must be refunded. i.

VA_Guidelines.txt

a4236717-6bbf-4981-abb0-698054780ee6

VA Appeals The seller or the purchaser may appeal a disapproval decision to the VA RLC with jurisdiction over where the property is located within 30 calendar days from the notification of disapproval. When the VA RLC receives an appeal of a denied request, VA will request that the servicer send a copy of the application package used in making the decision.

VA_Guidelines.txt

6923c08b-2f86-4e1f-8e32-0992feac57ec

The loan package must be provided to the VA office of jurisdiction of where the property is located within 7 calendar days. The VA RLC of jurisdiction of where the property is located will review and either approve the assumption on appeal or uphold the decision to deny the application.

VA_Guidelines.txt

8e3733ee-2002-4d16-ad4f-1f329c27a405

If approved, the servicer should close the assumption within 30 calendar days of VA’s approval and submit a closing package to the VA RLC of jurisdiction of where the property is located. If the appeal is not approved, VA’s notice will advise the seller of the right to request a special approval within 15 calendar days of receipt of the disapproval notice.

VA_Guidelines.txt

b5e71e56-ffc7-4141-867c-cd75eeedc225

Special Approval: Following an appeal to VA, the seller may request special approval within 15 calendar days of receipt of the disapproval notice. Continued on next page 5-20 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued i.

VA_Guidelines.txt

33427586-826b-485a-8140-19e50bf262bc

VA Appeals, continued VA’s special approval does not release any obligor from liability.

VA_Guidelines.txt

78fdde1a-d0db-47cb-a463-cf2f3c52fd1d

VA may determine that special approval of the assumption is in the best interest of the government if: · the seller agrees to remain secondarily liable on the loan following assumption, · the seller is unable to otherwise continue payments on the loan, and reasonable efforts have been made to find a creditworthy borrower for the property, or · if an obligor is released without proper approval, VA

VA_Guidelines.txt

a79560a6-e6e7-44ab-8d72-38119335b290

obligor is released without proper approval, VA may be released from further liability on the guaranty

VA_Guidelines.txt

2bbae5da-262f-400a-af67-87fa7356c526

.

VA_Guidelines.txt

614904df-1602-4422-bcea-21be3a547053

VA has 7 calendar days from receipt of the seller’s request to make this determination. If approved, the VA RLC will notify the servicer and seller that the assumption has been approved and that the seller will not be released from liability to VA; however, the property can be transferred to the purchaser(s). The servicer should close the assumption with 30 days of VA’s special approval.

VA_Guidelines.txt

6ff89365-a1bb-4bce-b07b-4e0d5143d43c

If disapproved, the VA RLC will notify the seller and lender that the assumption has not been approved, that the seller will not be released from liability, and the property cannot be transferred. j. Steps After Approval Once approved, the servicer will complete the transfer with a loan closing that meets all federal and any state and local regulations and requirements. k.

VA_Guidelines.txt

3e33ded6-af95-43f0-8419-d5154eafa450

Assumption Clause The VA-approved assumption clause must be included in the deed conveying the property to the purchaser. The VA RLC of jurisdiction of where the property is located has an example(s) of assumption clauses that are both acceptable to VA and compliant with state and local requirements.

VA_Guidelines.txt

6dcbbc96-0746-4faa-a04c-6024ba6587e7

Servicers should contact the RLC of jurisdiction of where the property is located to obtain sample language and/or documents. The servicer is responsible for reviewing the document to establish that it contains the approved assumption clause and recording data and that it has the legal effect intended.

VA_Guidelines.txt

32f0117e-ba79-4148-9562-2dcf5d74ddef

Continued on next page 5-21 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued l. Agreement Creating Liability If the seller and purchaser have satisfied all the requirements of 38 U. S.

VA_Guidelines.txt

5f32afa2-4918-444e-b8d8-a7b5849518e0

S. C. 3714(a)(1), but the transfer deed containing an acceptable assumption clause was not included, the servicer must prepare an “Agreement Creating Liability to Holder and to United States” to execute the release. The servicer must prepare an Agreement Creating Liability to Holder and to “United States” to execute the release.

VA_Guidelines.txt

aa2ca38e-b2f2-429b-9bde-685ea8550686

Three copies are needed for execution and must be signed by the: · seller, · purchaser, and · servicer as agent for the Department of Veteran Affairs. The VA RLC of jurisdiction of where the property is located has examples of agreements that are both acceptable to VA and compliant with state and local requirements.

VA_Guidelines.txt

0a6d68d1-cd03-4fcb-85af-18a52d25769b

Servicers should contact the VA RLC of jurisdiction of where the property is located to obtain sample language and/or documents. Once received, the servicer is responsible for reviewing the document to establish that it was properly completed and that it has the legal effect intended. The holder or its authorized servicing agent will then execute the release portion of the form.

VA_Guidelines.txt

67488955-ff42-4d56-9093-5960c7b24c1a

In those states where recording the assumption and/or the release instrument is necessary, the Veteran may be asked to pay the recording fees. m. Funding Fee At loan transfer, the purchaser is required to pay a funding fee to the servicer equal to one- half of one percent of the loan balance as of the date of transfer.

VA_Guidelines.txt

4925b271-aeba-49a3-bfdf-c9a9fbe2211e

See Chapter 8 of this handbook for information on other exemptions from the funding fee and how to verify exemption status. When the transfer is a result of an unrestricted transfer, a funding fee is not required. The fee must be paid to VA within 15 calendar days of the date of assumption using the VA Funding Fee Payment System – VA FFPS .

VA_Guidelines.txt

29be5a61-81ee-4ce8-bf3a-2930409db5e7

The VA funding fee cannot be financed into the loan being assumed. It must be paid in cash at the time of transfer. n. Notification to VA Servicers must notify VA after ownership has been transferred and release of liability has been granted. Additional information can be found at: http://www.benefits.va.gov/homeloans/valeri.asp.

VA_Guidelines.txt

0cd321fc-a598-468f-8d77-9776c3a39363

Continued on next page 5-22 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued n.

VA_Guidelines.txt

57fa5b4c-b7af-4eb4-9eda-50a00027860c

Notification to VA, continued, Servicers must also submit a completed closing package to the VA RLC of jurisdiction of the property after ownership has been transferred and an ROL has been granted.

VA_Guidelines.txt

9715f51b-49d9-49b1-a972-2e19dddc3811

The package should contain documentation in the following stacking order: Table 3: Assumption Stacking Order Order Document 1 Lender’s cover or transmittal letter, including the reason for submission

VA_Guidelines.txt

bc7913ae-8af6-4df3-b474-2f0593959849

. 2 If Substitution of Entitlement, then Certificate of Eligibility for both Veteran seller and assumer and signed VA Form 26-8106, Statement of Veteran Assuming GI Loan 3 Copy of quit claim deed or other recorded document with transfer of ownership with VA clause or if not included, signed assumption agreement by all parties (seller, assumer, and servicer/holder) 4 Evidence loan current and the

VA_Guidelines.txt

1e4cd965-588e-4d48-9a81-9f50e972f0dc

servicer/holder) 4 Evidence loan current and the time of the transfer 5 VA Form 26-8937, Verification of VA Benefits (if applicable) 6 URLA with revised VA Form 26-1802a, Department of Housing and Urban Development (HUD)/VA Addendum to URLA

VA_Guidelines.txt

dd7e6f53-8cdb-45e6-ad5e-370dc054fbd2

.

VA_Guidelines.txt

19127bfb-83b4-4365-b6de-1c566bb2c194

These final forms must be properly completed and legible.

VA_Guidelines.txt

194bbe61-061c-42db-9952-eca270fc8ed8

Forms may be signed and dated anytime from the date of initial application to the date of loan closing. 7 Closing Disclosure Statement (CD) 8 VA Form 26-8497, Request for Verification of Employment or alternative verification of employment (VOE), and other verifications of income such as pay stubs and tax returns

VA_Guidelines.txt

f855c0b7-3014-46fc-996e-ad8bcf07c549

. 9 CAIVRS, borrower/co-borrower 10 All credit reports obtained in connection with the loan and any related documentation such as explanations for adverse credit, if required

VA_Guidelines.txt

3595e398-3ffe-4275-90a6-bafeffb9496b

. 11 VA Form 26-8497a, Request for Verification of Deposit or alternative VOD, and other related documents 12 For automated underwriting cases: feedback certificate and underwriter’s certification 13 VA Form 26-6393, Loan Analysis, completed and legibly signed 14 If a loan is submitted more than 60 days after loan closing, a statement signed by a corporate officer of the lender that identifies the

VA_Guidelines.txt

f88b6462-3ae0-4c04-ab8e-06c18276c95d

officer of the lender that identifies the loan, provides the specific reasons for late reporting and certifies that the loan is current

VA_Guidelines.txt

38ee13c5-687c-4578-a159-3452b78a24e6

. 15 VA Form 26-0592, Counseling Checklist for Military Homebuyers, if the applicant is on active duty Continued on next page 5-23 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued n.

VA_Guidelines.txt

bcdf4774-791e-4a51-a9eb-30f5d40a7940

Notification to VA, continued, Table 3: Assumption Stacking Order, continued Order Document 16 Purchase/Assumption/earnest money contract 17 Other necessary documents (for example – but not limited to, a POA if used, lenders loan quality certification) 18 Copt of the original note and all riders Servicers are required to retain the supporting documentation for all transfers, assumptions, and an

VA_Guidelines.txt

824806c8-ee31-4b72-962f-a1cfe5412612

for all transfers, assumptions, and an ROL for at least 3 years from approval or denial

VA_Guidelines.txt

21b967e5-d93a-4bec-9960-03eef565df7e

. o.

VA_Guidelines.txt

19318a68-baa8-4ef5-8efe-9dff6ddb4f14

Assumptions without Prior Approval Servicers must notify VA’s Loan Production Department at the RLC of jurisdiction of where the property is located (in addition to the VALERI system) within 60 days after learning of a transfer that did not receive prior approval by the servicer or VA.

VA_Guidelines.txt

584802b8-045b-496e-ae58-592aae7e6db0

The notice must advise VA whether the servicer intends to exercise the option to immediately refer the case to foreclosure or to give the transferor and transferee the opportunity to apply for “retroactive approval” of the assumption.

VA_Guidelines.txt

a15bdf31-d9b2-4303-af50-8c011392076c

Upon learning of an unapproved transfer, the servicer may decide to demand immediate payment of the one-half of one percent VA funding fee and request a copy of the instrument of transfer to determine the liability of the purchaser. Loans for which a commitment was made prior to March 1, 1988, are commonly known as freely assumable loans.

VA_Guidelines.txt

9911b208-2e30-4022-a416-3383a3eb4ff3

Owners have the right to sell the property securing these loans under any terms; servicers may not impose a restriction, charge, or fee that would limit or nullify this right. A funding fee is not assessed on assumptions of loans where the commitment was made prior to March 1, 1988. Liability assumed.

VA_Guidelines.txt

707ad747-93e8-4fc2-aaaa-890133214e17

Liability assumed. The purchaser should be afforded an opportunity for retroactive approval of the transfer if: · the purchaser pays the funding fee, · the purchaser has assumed all of the seller’s obligations in the transfer deed, · the assumption language is legally binding, and · it appears that the purchaser intends to satisfy those obligations.

VA_Guidelines.txt

957b0138-af6b-4e8c-914c-c03fa4fcb418

When these conditions have been met, then the Veteran and transferee must specifically apply for an ROL under 38 U. S. C. 3713. See subsection a of this topic. An ROL does not restore the original Veteran’s VA home loan entitlement and does not affect the guaranty on the loan.

VA_Guidelines.txt

393ca669-b095-4d06-80b6-db07b3b19569

Continued on next page 5-24 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued o.

VA_Guidelines.txt

4a2826d4-3122-4ee3-aa40-ac2439d4d5b2

Assumptions without Prior Approval, continued After the completion of an ROL, a Veteran purchaser can apply for a Substitution of Entitlement to restore the Veteran seller’s entitlement (see subsection r of this topic). Liability not assumed.

VA_Guidelines.txt

c56d3587-60d7-4b3b-968d-ed1f9ef2953e

Liability not assumed. If prior approval of a transfer was not obtained and the title was transferred “subject to” the mortgage or deed of trust, then the purchaser usually has no liability on the loan and no liability for the funding fee. In this instance, the purchaser may have no incentive to maintain the payments.

VA_Guidelines.txt

c8377645-f0f3-413e-9c49-08e025cbe6af

The original Veteran seller is still liable if the home subsequently defaults and VA pays a claim based on the Veteran’s entitlement used to guaranty the loan. It may still be advisable to extend the opportunity to apply for retroactive approval of the transfer, with the expectation that the purchaser will assume liability for repayment of the loan.

VA_Guidelines.txt

1676cde0-bbb8-45c4-9f83-7e39797b89df

The original mortgagor remains liable on the loan unless he or she is released from personal liability with a qualifying assumption. The Veteran and transferee must specifically apply for an ROL under 38 U. S. C. 3713. See subsection a of this topic. An ROL does not restore the original Veteran’s VA home loan entitlement and does not affect the guaranty on the loan.

VA_Guidelines.txt

9d3f8ced-4f3d-4cdf-8d20-da7680044ac0

The LGC remains in the original Veteran’s name. After the completion of an ROL, a Veteran purchaser can apply for an SOE to restore the Veteran seller’s entitlement. See subsection r of this topic.

VA_Guidelines.txt

9b2b6afb-1e1a-4822-9c7f-b43d4912b76f

See subsection r of this topic. An exception applies when the loan was made by a state, territorial, or local governmental agency and the law requires acceleration of the maturity of the loan upon sale or transfer of the property to a person not eligible for assistance under the special program.

VA_Guidelines.txt

dbf9ccc0-479f-4f24-be97-870d5af5aea8

VA has approved due-on-sale clauses to allow Veterans to participate in these programs and take advantage of below-market interest rates and benefits. Process for Retroactive Approval. If the Veteran and current owner will be permitted to apply for retroactive approval, the assumption process should be completed in the same manner as if the application had been received prior to the transfer.

VA_Guidelines.txt

2e809eca-e9b1-4f80-8780-3b14462d5816

This includes the right of appeal to VA, if the request is denied. Should a purchaser fail to cooperate in the retroactive approval process, a servicer has the option of accelerating the loan.

VA_Guidelines.txt

df4c52a0-1a23-4377-90be-507f74e3f27d

When making this decision, the servicer should consider the implications of state law when delaying acceleration as compared to the prospect of accelerating a current loan that has the potential for future timely payments. Any decision must be reported to the VA RLC of jurisdiction of the property and in VALERI.

VA_Guidelines.txt

e0afaf5f-99aa-453b-9bf5-f112dc332ffb

Continued on next page 5-25 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued p.

VA_Guidelines.txt

c08335ee-341b-40a1-a33d-af309d940720

General Release of Liability Procedures VA-guaranteed loans dated prior to March 1, 1988, can be transferred without VA’s prior approval, borrowers and transferees may apply for an ROL before or after the closing of the transaction. Servicers with automatic authority must process an ROL when the borrower and transferee specifically apply for a release.

VA_Guidelines.txt

883fe122-8396-445f-91b2-a1708c5ac514

Servicers without automatic authority that are servicing loans for holders with automatic authority must advise the holders of any assumption approval requests, and the holders will be responsible for determining creditworthiness. A processing charge may be assessed for reviewing a request for an ROL just as on a request for approval of ownership change on a later loan.

VA_Guidelines.txt

f30941ae-0124-4f31-a17c-ae8f06ac8dda

When a borrower sells his or her home to transfer ownership without requesting an ROL, the servicer may charge up to $50 for amending its records to reflect a change in ownership, if the parties involved agree and it is permissible under the loan agreement. No funding fee may be assessed on assumptions of loans where the commitment was made prior to March 1, 1988. q.

VA_Guidelines.txt

787e1ace-3f11-480a-bed2-2a1f17a7cdb7

Release of Liability Procedures for Divorce A Veteran may seek release from personal liability when his or her former spouse acquires the property as the outcome of a legally binding separation agreement or divorce proceedings and the ex-spouse was jointly liable on the loan with the Veteran prior to the divorce.

VA_Guidelines.txt

e8bb3231-75ec-4d60-bbf4-459b7432ceb1

Servicers may process requests for an ROL from divorced Veterans using the same general procedures outlined in subsection a of this topic. When processing an ROL in divorce cases in which the Veteran’s former spouse receives the property, the servicer is authorized to charge the normal processing fee to complete the credit underwriting. A funding fee may not be assessed.

VA_Guidelines.txt

868b8930-d2af-4219-8ec3-37c4d332b7f0

The following requirements must be met: · the divorce is final and absolute and it is determined no appeal will be taken, or · a signed separation agreement by all parties based on local laws and available documents with reasons why a separation agreement is used in lieu of a final decree of divorce, and · the entire estate encumbered for the VA-guaranteed loan has become vested in the name of

VA_Guidelines.txt

fc2a593b-9641-4f5e-8941-1afb3e93fbb8

loan has become vested in the name of the Veteran’s former spouse, and · there is not any knowledge of any property settlement that would make the Veteran liable between the parties to pay the guaranteed loan

VA_Guidelines.txt

bcfb2974-76bd-46f4-9817-f03a43381cf5

.

VA_Guidelines.txt

5a3f811c-b2a6-4a8d-bdb3-f8733974da37

Continued on next page 5-26 VA Lenders Handbook 26-7 Chapter 5: How to Process VA Loans and Submit them to VA Topic 5: Processing Loan Assumptions by the Current Servicer or Holder of the VA Loan, continued q. Release of Liability Procedures for Divorce, continued Some states require a specific amount of time between a legal separation and a divorce (up to one year).

VA_Guidelines.txt

8b478c41-a71a-4c97-ad61-8cfa35d4f893

With proper documentation, do not delay the request for an ROL, if the divorce is not final, but a legal separation agreement is in effect. In some instances, the ex-spouse may also be a Veteran; however, for VA purposes, only the applicant who used their entitlement to guaranty the loan is considered a Veteran.

VA_Guidelines.txt

b1727ddf-f8a2-4593-aea5-458bb47d57e2

For example, John and Mary Doe are divorcing and both have obtained a COE; however, only John’s COE was used to guarantee the loan. Since Mary’s COE was not used to guarantee the home, only John is considered the Veteran. If Mary wishes to assume the loan, a credit qualifying package is required for an ROL and Mary can substitute her entitlement with the assumption.

VA_Guidelines.txt

ae49bee5-9438-4c98-bdb2-e6f89be22fc2

When the Veteran is awarded the property, the ex-spouse may seek an ROL. Requests for an ROL from an ex-spouse in cases where the Veteran retains the property should be referred to the VA RLC of jurisdiction over the state where the property is located, to process a Non-Veteran Spouse (NVS) ROL.

VA_Guidelines.txt