20 Oct What is a VA loan?
A VA loan is a loan guaranteed by the Veteranâ€™s Administration. In consideration for the lendersâ€™ participation in the profits and guarantees of the government-insured loan program, the lender agrees to provide certain loan servicing functions as described in the VAâ€™s Lender Handbook.
The servicing functions include extending to the borrower all reasonable means of forbearance, including an opportunity to apply for a mortgage foreclosure avoidance workout and consideration of a temporary suspension of borrowerâ€™s payments of extension of the loan.
The servicer is required to establish timely and helpful and responsive telephone contact with the delinquent borrowers to determine why payments were not made on the mortgage. Alternatively, the servicer may arrange a face-to-face meeting with the borrower to evaluate the prospects for curing the mortgage default. The staff should be trained in techniques of loan servicing that include the pursuit alternatives to foreclosure in an effort to allow veterans to maintain their homes.
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