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Financial Services Law Insights and Observations

VA encourages relief for Tropical Storm Imelda-affected borrowers

Federal Issues Disaster Relief Department of Veterans Affairs Consumer Finance Mortgages

Federal Issues

On November 8, the Department of Veterans Affairs (VA) issued Circular 26-19-29, encouraging mortgagees to provide relief for VA borrowers affected by Tropical Storm Imelda. Among other forms of assistance, the Circular encourages loan holders and servicers to (i) extend forbearances to borrowers in distress because of the disaster; (ii) establish a 90-day moratorium from the disaster declaration date on initiating new foreclosures on affected loans; (iii) waive late charges on affected loans; and (iv) suspend credit reporting related to affected loans. The Circular is effective until January 1, 2021. Mortgage servicers and veteran borrowers are also encouraged to review the VA’s Guidance on Natural Disasters.

Find continuing InfoBytes coverage on disaster relief guidance here.

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