Department of Veterans Affairs (VA).
This notice provides updated information to participants in the Department of Veterans Affairs (VA) Home Loan Guaranty program concerning the maximum allowable bankruptcy attorney fees that are incurred by a servicer for legal services performed on their behalf. The notice also provides the allowable maximum attorney fees in calculating the indebtedness used to determine the guaranty claim payable upon loan termination. The table in this notice contains the amounts the Secretary has determined to be reasonable and customary for all States, following an annual review of amounts allowed by other government-related home loan programs.
The new maximum amounts for bankruptcy attorney fees will be allowed for each bankruptcy filed on or after March 9, 2017.
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FOR FURTHER INFORMATION CONTACT:
Mr. Andrew Trevayne, Assistant Director for Loan and Property Management (261), Loan Guaranty Service, Department of Veterans Affairs, Washington, DC 20420, (202) 632-8795 (Not a toll-free number).
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The VA Home Loan Guaranty program authorized by title 38, United States Code (U.S.C.), Chapter 37, offers a partial guaranty against loss to lenders who make home loans to veterans. VA regulations concerning the payment of loan guaranty claims are set forth at 38 CFR 36.4300, et seq. Computation of guaranty claims is addressed in 38 CFR 36.4324, which states that one part of the indebtedness upon which the guaranty percentage is applied is the allowable expenses/advances as described in 38 CFR 36.4314. Paragraph (b)(5)(ii) of section 36.4314 describes the procedures to be followed in determining what constitutes the reasonable and customary fees for legal services in the termination of a loan.
The Secretary annually reviews allowances for legal fees in connection with the termination of single-family housing loans, including foreclosure, deed-in-lieu of foreclosure, and bankruptcy-related services, issued by the Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). Based on increases in bankruptcy attorney fees announced over the past year by these entities, the Secretary has deemed it necessary to publish in the Federal Register a table setting forth the revised amounts the Secretary now determines to be reasonable and customary for bankruptcy attorney fees. The table reflects the primary method for foreclosing in each state, either judicial or non-judicial, with the exception of those states where either judicial or non-judicial is acceptable. The use of a method not authorized in the table will require prior approval from VA. This table will be available throughout the year at: http://www.benefits.va.gov/homeloans/.
There has been no change to the amounts VA will allow for attorney fees for foreclosure termination and for deeds-in-lieu of foreclosure. VA will continue to monitor these fees on an annual basis, as we are aware that other entities are conducting ongoing reviews of these fees.
The following table represents the Secretary's determination of the reasonable and customary cost of legal services for the preferred method of terminating VA loans in each jurisdiction under the provisions of 38 CFR 36.4314(b)(5)(ii).
|Jurisdiction||VA non-judicial foreclosure 1 2||VA judicial foreclosure 1 2||Deed-in-lieu of foreclosure|
|District of Columbia||1,200||2,300||350|
|New York—Western Counties 3||N/A||2,675||350|
|New York—Eastern Counties||N/A||3,475||350|
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|1 When a foreclosure is stopped due to circumstances beyond the control of the holder or its attorney (including, but not limited to bankruptcy, VA-requested delay, property damage, hazardous conditions, condemnation, natural disaster, property seizure, or relief under the Servicemembers Civil Relief Act) and then restarted, VA will allow a $350 restart fee in addition to the base foreclosure attorney fee. This fee recognizes the additional work required to resume the foreclosure action, while also accounting for the expectation that some work from the previous action may be utilized in starting the new action.|
|2 VA will allow attorney fees of $1050 (Chapter 7) or $1500 (initial Chapter 13) for obtaining bankruptcy releases directly related to loan termination. For multiple bankruptcy filings under either chapter, VA will allow an additional $500.|
|3 Western Counties of New York for VA are: Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Livingston, Monroe, Niagara, Ontario, Orleans, Steuben, Wayne, Wyoming, and Yates. The remaining counties are in Eastern New York.|
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Gina S. Farrisee, Acting Chief of Staff, approved this document on January 27, 2017, for publication.
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Approved: January 27, 2017.
Office Program Manager, Office of Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs.
[FR Doc. 2017-02474 Filed 2-6-17; 8:45 am]
BILLING CODE 8320-01-P