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Highlight Updates Foreclosure Moratorium

The VA circular has requested193 that loan holders establish a ninety-day moratorium (from the date of the disaster) on initiating new foreclosures, citing:

“... VA regulation 38 C.F.R. § 36.4324(a)(3)(ii) which allows additional interest on a guaranty claim when eventual termination has been delayed due to circumstances beyond the control of the holder, such as VA-requested forbearance. Because of the widespread impact of Hurricane Harvey, holders should review all foreclosure referrals to ensure that borrowers have not been affected significantly enough to justify delay in referral. Any questions about impact should be discussed with the VA Regional Loan Center (RLC) of jurisdiction.”194

The VA Guidance on Natural Disasters states:

“Although the loan holder is ultimately responsible for determining when to initiate foreclosure and complete termination action, VA encourages holders to establish a 90 day moratorium on initiating new foreclosures in the disaster area.” 195