Processing Loans following a Natural Disaster Myron Head, ALGO

Processing Loans following a Natural Disaster Myron Head, ALGO Houston Kathy Bernheim, ALGO St. Petersburg

Processing Loans Following a Natural Disaster Providing the highest level of service by processing loans efficiently following: -Tornados -Wildfires -Hurricanes -Landslides -Earthquakes -Floods -Volcanic eruptions -Snowstorms -Tsunamis -Other Natural Disasters Ensuring that the property is not damaged or has been restored to its predisaster condition or better 2

Processing Loans Following a Natural Disaster Guidance for processing loans: VA Guidance on Natural Disasters is readily available on VA’s website, https:// www.benefits.va.gov/homeloans/documents/docs/va policy regarding n atural disasters.pdf Guidance is applicable to all natural disasters No need to wait for specific guidance to be published following a disaster 3

Processing Loans Following a Natural Disaster Disaster Declarations: Available at www.fema.gov/disasters List of Counties Declaration dates 4

Processing Loans Following a Natural Disaster Loans fall into 3 categories: Loan closed prior to disaster -Eligible for guaranty as usual -Veteran may contact insurance company if property sustained damage Appraisal not yet completed -Request appraisal as usual -Appraiser will note any apparent needed repairs and consider any effect of the disaster on market value Appraisal completed, but loan not closed -Additional documentation required (next slide) 5

Processing Loans Following a Natural Disaster Documentation required when appraisal completed, but loan not closed, prior to disaster: Lender Certification that property has been inspected to ensure that it was not damaged or has been restored to pre-disaster condition or better Veteran Certification that he/she has inspected the property and found the condition to be acceptable. The Veteran acknowledges that he/she will not be charged for any disaster-related expenses and wishes to close the loan. VA Loan Summary Sheet (VA Form 26-0286) with a notation “Lender and Veteran Disaster Certifications Enclosed”. If the local authority requires additional inspections, they must be provided at no cost to the Veteran. If there is an indication of a decline in value, the lender must have the appraiser update the original value estimate. If the appraiser’s update confirms a decline in value, the loan amount must be reduced accordingly. Employment/Income Certification confirming that the Veteran’s employment and income have not changed. Any changes must be evaluated prior to closing. 6

Processing Loans Following a Natural Disaster Appraisal related questions: Lenders may contact the fee appraiser for repair certifications Appraisers may be unavailable due to the disaster If unable to reach the appraiser, lenders should contact the RLC to have another appraiser assigned Fees for appraisal-related inspections or any other disaster-related expenses may not be charged to the Veteran 7

Processing Loans Following a Natural Disaster General guidance for natural disasters will also apply to disasters that may involve one or a small number of homes, for example: -House fire -Tree falling on a house -House struck by a car While there will not be a disaster declaration, the same general processing steps should be followed to ensure the property is repaired and that every opportunity to avoid foreclosure is provided to Veterans with closed loans. 8

Processing Loans Following a Natural Disaster Related information: Assistance to Homeowners – Servicers are encouraged to offer forbearance and moratoriums on foreclosures. Veterans should contact their servicer or the RLC for assistance. Specially Adapted Housing (SAH) – Supplemental grant funds may be available if a home on which a Veteran used an SAH grant is damaged in a natural disaster. Please contact the RLC for assistance. 9

Processing Loans Following a Natural Disaster Questions? 10

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