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12.3.7.2 VA Foreclosure Moratorium

On March 18, 2020, VA issued a circular that “encourage[d]” servicers to put a moratorium in place.386 This permissive guidance was replaced by the CARES Act. Upon the expiration of the CARES Act moratorium, the VA strengthened its moratorium language in later circulars. According to Circular 26-21-10, “[d]ue to the ongoing COVID-19 national emergency and its impact on Veteran borrowers, all properties secured by VA-guaranteed loans, including those previously secured by VA-guaranteed loans but currently in VA’s REO portfolio, were subject to a moratorium on foreclosure and eviction through July 31, 2021. Except with respect to a vacant or abandoned property, the moratorium applied to the initiation of foreclosures, the completion of foreclosures in process, and evictions.”387 Before the extension to July 31, 2021, the VA had extended the moratorium initially from May 17, 2020 (the expiration of the CARES Act moratorium) to June 30, 2020, to August 31, 2020, to December 31, 2020, to February 28, 2021, to March 31, 2021, and to June 30, 2021. The VA did not extend their moratorium beyond July 31, 2021, and did not adopt a bridge between the end of the moratorium and the beginning of the effective date of the CFPB’s amendments to Regulation X.

Footnotes

  • 386 VA Circular 26-20-8 (Mar. 18, 2020).

  • 387 VA Circular 26-21-10 (June 25, 2021).