Option 12. V.A. LOAN MODIFICATION/ REFUNDING
(Available for VA loans only) (Need at least 30 days to process)

Definition: VA has the discretionary authority to buy a loan from the holder and take over the servicing. This is called “refunding”. Refunding may give VA the flexibility to consider options to help you save your home that your current lender either could not or would not consider. When the VA refunds a loan under 38 U.S.C. 36.4318, the delinquency is added to the principal balance and the loan is re-amortized. Your new loan will be non-transferable without prior approval from the Secretary. If your interest rate was lowered and an assumption is approved, the interest rate will be adjusted back to the previous rate. For more information you my go to The U.S. Dept of Veterans Affairs.

If you have the ability to make mortgage payments, or will have the ability in the near future, but your loan holder has decided it cannot extend further forbearance or a repayment plan, you may qualify for refunding. If your loan is in default and you are not able to repay the loan according to the lender’s terms, you should download the following forms: VA Form 20-5655, 26-6807a, and Refunding Information List. You should submit these forms along with a letter of request (stating the reason for default and that you would like to be considered for VA refunding) to VA. If refunding is appropriate, VA will notify you.

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