New collection (Request for a new OMB Control Number)
No
Emergency
07/09/2021
07/01/2021
table that charts list comparision
Requested
Previously Approved
6 Months From Approved
17,200
0
25,800
0
869,116
0
VA anticipates tens of thousands of Veterans will be exiting forbearance in the coming months and will require the COVID-19 Refund Modification to help avoid foreclosure of their homes. VA is temporarily expanding the list of loan modification options available to servicers that do not require VAâs prior approval to include a new loan modification, the COVID-19 Refund Modification, to assist certain COVID-impacted veterans as they exit a COVID-19 forbearance. Under 38 U.S.C. 3720(a)(2), Congress has provided the Secretary with discretion â[n]otwithstanding the provisions of any other lawâ to set the terms and conditions to which the Secretary will consent to loan modifications. Additionally, while VA has outlined in regulation at 38 CFR 36.4315(a) the terms of loan modifications that do not require prior VA approval, VA may waive a regulatory requirement if VA finds the interest of the Government are not adversely affected and such waiver would relieve undue prejudice to a debtor, holder, or other person without impairing the vest rights of any person affected. 38 CFR 36.4338(a).
To further assist Veterans with VA-guaranteed loans retain their homes, VA is temporarily expanding the list of loan modification options that do not require VAâs prior approval to include a new loan modification, the COVID-19 Refund Modification, to assist certain COVID-impacted Veterans as they exit a COVID-19 forbearance. To ensure that servicers are able to implement this new modification in time to assist the large number of borrowers exiting forbearance this summer/fall, VA plans to announce the COVID-19 Refund Modification via VA Circular in early- to mid-July with an effective date of July 27, 2021. This timeline is being coordinated by an interagency working group led by the Domestic Policy Council and National Economic Council to ensure that all federal housing agencies release guidance this summer offering additional home retention options to borrowers with federally backed mortgages.
As outlined in the VA Circular, servicers will be required to prepare and execute a note and security instrument on behalf of VA as part of this new modification, which includes a VA purchase of past due payments and, in some cases, unpaid principal. Servicers will also be required to provide VA with both legal documents and report the actions taken to bring the defaulted loan current in VAâs electronic loan servicing system (VALERI).
As part of this administrative action, VA is requesting emergency approval of a new information collection (IC) that is associated with servicers (and Veterans) preparing, executing, and providing the required loan documents to VA. Much like VAâs recently published COVID-19 Veterans Assistance Partial Claim Payment program (COVID-VAPCP), and its accompanying IC requirements under OMB control number 2900-0889, this new IC does not require any specific form. Rather, VA will accept any note and security instrument that meet the requirements outlined in VAâs Circular guidance. The terms VA requires for the note and security instrument for the COVID-19 Refund Modification and the COVID-VAPCP are identical; the only differences are who is eligible for each program and what amounts can be included in the loan repayable to VA (e.g., past due payments, unpaid principal).
In addition to the new IC request, VA is requesting emergency approval of a revision to existing OMB control number 2900-0021. Under this IC, servicers are already required to report activity on every VA-guaranteed loan in their servicing portfolio, regardless of the home retention option pursued. The amendment to this IC merely adds additional data elements to existing reporting requirements/loss mitigation events to facilitate reporting and oversight of the COVID-19 Refund Modification, as well as payment of the COVID-19 Refund.
Given the time constraints associated with launching this new modification option, VA is developing technology requirements that will deliver a minimally viable product (MVP) to enable servicers to report data elements associated with executing the COVID-19 Refund Modification and requesting VA purchase of past due payments and, if necessary, unpaid principal. In order to deliver an MVP on time, VA will ask servicers to utilize existing loss mitigation events; that is, the Partial Claim and Loss Mitigation events to report necessary data elements. Both events already collect from servicers the information relevant to reporting the execution of the COVID-19 Refund Modification. VA plans, however, to add a drop-down indicator to the Partial Claim event to allow it to track that the event being reported is a COVID-19 Refund Modification. VA also plans to add an additional data element to the Partial Claim event to collect information regarding any amounts of unpaid principal included in the COVID-19 Refund request.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
SupportingStatement_2900-NEW_COVID-19_Refund.docx
COVID - 19 Refund Modification