21.08 FINAL VA DISASTER LOAN MODIFICATION AGREEMENT (02/01/18)

© VA Servicers Handbook - M26-4

a. After successfully completing the TPP, the servicer will provide the borrower with the VA Disaster Loan Modification Agreement. The servicer must prepare the agreement early enough in the trial period to allow sufficient processing time so that the modification becomes effective on the first day of the month following the final trial period month.

b. In the event the borrower does not make the final trial period payment on, or before the due date set forth in the TPP (but does make the final trial period payment before the end of the month in which it is due), the servicer may complete the VA Disaster Loan Modification Agreement making it effective on the first day of the second month following the final trial period month. In this scenario, the borrower will not be required to make an additional trial period payment during the (interim) month in-between the final trial period month, and the month in which the modification becomes effective.

c. The borrower must sign, and return the VA Disaster Loan Modification Agreement. The borrower must agree to set up an escrow account for taxes, hazard, and flood insurance prior to the beginning of the TPP, if one does not currently exist.