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1.5.6.2 Mortgage Forbearance

The VA “encourages holders of guaranteed loans to extend forbearance to borrowers in distress resulting from Hurricane Harvey.” Servicers are advised to reference 38 C.F.R. § 36.4311, which allows the reapplication of prepayments to cure or prevent a default, and 38 C.F.R. § 36.4315, which allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided conditions in the regulation are satisfied.190

When members of the National Guard are called to active duty as part of recovery efforts, the VA “encourages servicers to extend special forbearance to National Guard members who experience financial difficulties because of their service.”191

Helpful references include VA regulations on:

  • ● Prepayments (38 C.F.R. § 36.4311);
  • ● Advances (38 C.F.R. § 36.4314);
  • ● Loan Modifications (38 C.F.R. § 36.4315); and
  • ● Supplemental Loans (38 C.F.R. § 36.4359) (may be of assistance in appropriate cases).192

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