InfoBytes Blog
VA Circular clarifies rules on cash-out refis
On February 14, the Department of Veterans Affairs (VA) released Circular 26-19-05 (and on February 15, accompanying Change Circular 26-19-05) to clarify the VA’s interim final rule regarding VA-guaranteed cash-out refinancing loans, which was released in December 2018 and became effective on February 15. The interim final rule was previously covered by InfoBytes. Among other things, the Circular provides clarification regarding (i) the Net Tangible Benefit test; (ii) the contents of the loan comparison and home equity disclosures (including sample 3-day and final loan closing disclosures); (iii) the loan seasoning requirements, including a new obligation that, for loans refinanced within 1 year of the original closing date, lenders obtain a payment history/ledger documentating all payments, unless a credit bureau supplement clearly identifies all payments made in that timeframe; and (iv) the manner by which lenders should calculate fee recoupment.