H.R. 1815: VA Home Loan Program Reform Act

The VA Home Loan Program Reform Act aims to modify existing laws concerning home loans guaranteed by the Secretary of Veterans Affairs (VA). The key changes and provisions of the bill include:

Amendments to Home Loan Default Procedures

The bill makes several amendments to the rules governing what happens if a veteran defaults on their home loan. Key changes include:

• The Secretary of Veterans Affairs can pay lenders to avoid foreclosure when a veteran is in default.
• The Secretary is allowed to require the lender and veteran to complete necessary documents to secure the loan against the property.
• The Secretary can mandate actions from lenders to ensure compliance with loss mitigation efforts.
• Any decisions made by the Secretary regarding these actions are final and not open to judicial review.

Partial Claim Program

The act establishes a new program called the Partial Claim Program, which includes the following provisions:

• Under this program, if a loan is at risk of default, the Secretary may make a partial claim to help prevent foreclosure by paying a part of the indebtedness.
• The Secretary’s payment must not exceed 20% of the loan's unpaid principal balance and can only be made once per loan.
• This payment will be treated as a loan, which the veteran must repay under specific conditions, including a choice between a 0% interest repayment plan and a higher interest plan if they do not comply.
• The Secretary has the authority to recover any losses from the veteran if they default after receiving a partial claim.

Loss Mitigation Procedures

The act outlines that the Secretary must develop procedures for loss mitigation to assist veterans in avoiding foreclosure, which includes requiring lenders to provide options to help veterans manage their loans before the Secretary intervenes.

Reporting and Strategy

Within 90 days of the bill's enactment, the Secretary must submit a report detailing a strategy to ensure veterans are not disadvantaged when seeking real estate representation for purchasing homes using VA loans. This may include potential amendments to existing regulations.

Additional Provisions

• The Secretary may conduct audits to check compliance with the new rules.
• The authority for making a partial claim will terminate on September 30, 2027.

Impact on Judicial Review

Any decisions made by the Secretary regarding the handling of defaults or the partial claim process would not be subject to appeal in court. This means that the Secretary's discretion in these matters is broadly defined and not easily challenged.

Relevant Companies

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