Newsflash: VA Notifies Servicers that COVID-19 is a Reason for Default, Extends Circulars 26-18-5 and 26-18-3, and Publishes Appeals Job Aids
The Department of Veteran Affairs (VA) just published a VALERI Servicer Newsflash publishing a new Circular allowing COVID-19 as a reason for default, and extending Circulars 26-18-5 and 26-18-3 to April 1, 2022, and announcing Appeals Job Aids and other changes in VALERI. Circular 26-20-17 directs servicers to use the Electronic Default Notice Event labeled “National Emergency Declaration,” rather than “Energy/Environmental Cost” when reporting borrowers impacted by COVID-19 in the VA VALERI system. Servicers are directed to use this new event as the reason for default when borrowers request forbearance due to COVID-19. The new reason for default will be accepted for defaults prior to the 61st day of delinquency starting June 1, 2020. The Circular will be rescinded April 1, 2021. Additional protections offered to borrowers affected by COVID-19 are outlined in Circular 26-20-12.
The VA also announced that Circular 26-18-5, property management and servicing, and Circular 26-18-3, VA acceptance of properties, will be extended until April 1, 2022. Each was set to be rescinded April 1, 2020. Appeals Job Aids were also recently added to Knowledge in VALERI to assist servicers. In addition, the VA is reminding VALERI users that their accounts will be automatically deactivated if the accounts remained inactive past 90 days.
