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12.3.7.2 VA Foreclosure Moratorium

Significant Law Change

On March 18, 2020, VA issued a circular that “encourage[d]” servicers to put a moratorium in place.108 This permissive guidance was replaced by the CARES Act. Upon the expiration of the CARES Act, the VA strengthened its moratorium language in later circulars. According to Circular 26-21-5, “[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, are subject to a moratorium on foreclosure and eviction through June 30, 2021. Except with respect to a vacant or abandoned property, the moratorium applies to the initiation of foreclosures, the completion of foreclosures in process, and evictions.”109 Before the extension to June 30, 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, and then to March 31, 2021.

Footnotes

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

  • 109 VA Circular 26-21-5 (Feb. 16, 2021).