VA Provides Clarification and Updates to Policy Guidance for IRRRLs
In their Circular Letter 26-19-22, dated August 8, 2019, VA provided clarification and updates to policy guidance for Interest Rate Reduction Refinance Loans (IRRRLs). Circular 2619-22 was accompanied with three exhibits one of which, Exhibit B which contained instructions and examples about determining recoupment periods for IRRRLs.
Circular Letter 26-19-22, Change 1 noted that there were instances where lenders relied on Exhibit B specific examples without regard to the overall guidance provided in the main body of the Circular. As a result, Circular 26-19-22 was amended in the following areas:
- Calculating Statutory Recoupment;
- Energy Efficient Mortgage;
- Adjustable Rate Mortgages
- Compliance and reporting of previously closed loans;
- Evidence of guaranty; and
- Removal of Exhibit B of Circular 26-19-22 in its entirety.
It is important to note that Circular Letter 26-19-22, Change 1 did NOT rescind Circular Letter 26-19-22. Change 1 amended and added language in 26-19-22, but only Exhibit B was removed.
