2.04 SERVICER EVENT REPORTING (02/01/18)

© VA Servicers Handbook - M26-4

a. Under Title 38 Code of Federal Regulations (CFR), Section 36.4317, servicers must report events to VA to provide updates on the status of their loans. The reporting requirements apply to all VA-guaranteed loans, excluding manufactured homes that are not affixed to a permanent foundation, as defined in 36.4301. All data and events are reported electronically through VALERI.

b. Servicers report events as they occur, pursuant to regulatory requirements. For example, servicers are required to report the Electronic Default Notification (EDN) to inform VA that a loan is in default when a loan becomes at least 61 days delinquent. VA requires servicers to report data and events in order to monitor its portfolio of active loans and perform oversight of loan servicing activities.

c. Events reported in VALERI contain at least one or more data elements that provide specific information to VA about the loan. All reporting requirements are discussed in detail throughout this Handbook.

d. This section describes the following items regarding servicer event reporting:

1. How servicers report events to VA.

2. Reporting timeframes.

3. Event revision and withdrawal.

4. Late reporting.

e. Servicers Report Events to VA. If a servicer uses a service bureau that has a direct connection with VA, their service bureau will submit data through a nightly file exchange process which results in the creation of most servicing events in the VALERI application. Otherwise, servicers use the SWP to submit all events individually or through the Bulk upload process directly into the VALERI application. See below for additional information on each reporting method:

1. Automatically through a Service Bureau. Servicers are responsible for entering data into their servicing system. That data will then be collected and submitted on the servicer's behalf through the nightly file exchange from the servicer's service bureau. When submitted through a service bureau, the data cannot be revised or withdrawn after the file has been submitted to VA.

2. Manually through the SWP. Servicers are responsible for submitting the events directly into the SWP by the event due date. When submitting events through the SWP, servicers have the ability to submit, revise, and/or withdraw events as long as the event has not processed in the VALERI application. There are some events that all servicers must report through the SWP. The following events are described in greater detail throughout this Handbook: Basic Claims, Partial Release of Security, Partial Payment Returned, Invalid Sale Results, Foreclosure Attorney Information, and Improper Transfer of Custody.

(a) When reporting manually in the SWP, the user is validating that they acknowledge the following:

(1) User has received the VA training on servicer event administration.

(2) The event being submitted meets the criteria specified by VA in the training for event administration.

(3) The information provided in the event submission is accurate to the best of their knowledge, and is substantiated by the accompanying documentation.

(b) VA monitors the use of the Event Administrator feature, and should only be used in those situations where it is absolutely necessary and not as a substitute for your servicing system. This feature should be limited to administrative users as required by the servicer. Servicer administrators will be required to sign a document confirming that they understand all necessary guidelines.

(c) If VA determines servicers are misusing their authority to report events through the Event Administration feature on a loan, VA may choose to adjust the guaranty by the amount of any additional loss to the government.

(d) Manually through Bulk Upload. Servicers may also use a bulk upload template to report multiple events at one time through the SWP. The servicer can locate the bulk upload guide and template on the VALERI website at: http://www.benefits.va.gov/HOMELOANS/servicers_valeri.asp. Once data is submitted through a bulk upload spreadsheet, the data cannot be revised or withdrawn after the file has been submitted.

(e) Note: All servicers must report any Unauthorized Transfer of Ownership and Extenuating Property Circumstances to VA by telephone, email, fax, or letter, which are described in greater detail in Chapter 3, General Loan Servicing, of this Handbook.

f. Event Reporting Timeframes. Servicers must report all events according to VA-specified timeframes. Most events will be reported on either a monthly basis, or when the action occurs on the loan.

1. General Loan Events.

(a) Monthly Loan Status Update. Submitted automatically via a service bureau or manually through the SWP. The event must be reported by calendar day seven of every month until the loan becomes 61 or more days delinquent.

(b) Release of Liability. Submitted automatically via a service bureau or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer released the obligor from liability.

(c) Transfer of Ownership. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer learns that an authorized transfer has been completed.

(d) Unauthorized Transfer of Ownership. Submitted via telephone, e-mail, fax, or letter. The event must be reported by calendar day seven of the month, following the month in which the servicer discovered that the unauthorized transfer of ownership occurred.

(e) Partial Release of Security. Submitted manually via the SWP. The event must be reported by calendar day seven of the month, following the month in which the holder released the lien on a part of the security for the loan pursuant to 38 CFR 36.4327.

(f) Loan Paid in Full. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the loan was paid in full.

(g) Servicing Transfer (Transferring Servicer). Submitted automatically via a service bureau, or manually through the SWP by the servicer transferring the loan. The event must be reported by calendar day seven of the month, following the month in which servicer sold and transferred the loan.

(h) Servicing Transfer (Receiving Servicer). Submitted automatically via a service bureau, or manually through the SWP by the servicer boarding the new loan. The event must be reported by calendar day seven of the month, following the month in which the servicer boarded the new loan.

(i) Contact Information Change. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the information changed.

(j) Occupancy Status Change. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which there was a change.

2. Delinquent Loan Events.

(a) EDN. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven after the day 61 of delinquency.

(b) Loss Mitigation Letter Sent. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer sent the loss mitigation letter to the borrower.

(c) Delinquency Status. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported calendar day seven of the month, following the month in which the servicer reported the delinquency to VA, and once per month by day seven until default cures or the loan terminates.

(d) Default Cured/Loan Reinstated. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the default cures.

(e) Default Reported to Credit Bureau. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer reported the default to the credit bureau.

(f) Partial Payment Returned. Submitted manually via the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer returned the partial payment to the borrower.

(g) Foreclosure Attorney Contact Information. Submitted automatically via a service bureau, or manually through the SWP. Event should be reported by calendar day seven after the day the servicer refers the case to a foreclosure attorney.

3. Loss Mitigation Events.

(a) Repayment Plan Approved. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer approved the repayment plan.

(b) Special Forbearance Approved. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer approved the special forbearance agreement.

(c) Loan Modification Approved. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the servicer approved the loan modification.

(d) Loan Modification Complete. Submitted automatically via a service bureau or manually through the SWP. The event must be reported by calendar day seven of the month following the month in which the borrower executed the loan modification agreement.

(e) Compromise Sale Complete. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven of the month, following the month in which the compromise sale closed.

(f) Deed-in-Lieu (DIL) Complete. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven after the deed is recorded, or sent for recording.

4. Foreclosure Events.

(a) Foreclosure Referral. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven after the day the servicer refers the case to a foreclosure attorney.

(b) Foreclosure Sale Scheduled. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven after the day that the servicer is notified of the scheduled sale date.

(c) Results of Sale. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven after the sale.

(d) Confirmed Sale Date with no Transfer. Submitted automatically via a service bureau, or manually through the SWP. Event must be reported by calendar day seven of the month following the month the sale is confirmed if the servicer is not transferring custody of the property to VA. The event is only reported in confirmation/ratification of sale states.

(e) Transfer of Custody. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day 15 from the date of loan termination (for foreclosure and DIL of foreclosure only).

(f) Invalid Sale Results. Submitted manually through the SWP. The event must be reported by calendar day seven after the servicer discovered that the foreclosure sale was invalid.

(g) Improper Transfer of Custody. Submitted manually though the SWP. The event must be reported by calendar day seven after the servicer discovered that the transfer of custody of the property to VA was improper.

(h) Note: The event may NOT be reported unless the acquisition payment has been certified by VA.

5. Claim Events.

(a) File a Claim. Submitted manually through the SWP. The event must be submitted by calendar day 365 after loan termination (non-refund loans), or by calendar day 60 after the loan has been approved for refund (refunded loans).

(b) File a Supplemental Claim. Submitted manually through the SWP. The event may only be submitted after the File a Claim event, but before calendar day 365 after loan termination (non-refund loans), and only include items omitted from the File a Claim event. Servicers do not have an option to file a supplemental claim on refunded loans.

6. Bankruptcy Events.

(a) Bankruptcy Filed. Submitted automatically via a service bureau, or manually through the SWP. The event must be reported by calendar day seven after the servicer discovers that the obligor has filed for bankruptcy.

(b) Bankruptcy Update. Submitted automatically via a service bureau, or manually the SWP. The event must be reported by calendar day seven of the month following the significant bankruptcy event that has occurred (relief of stay filed, discharge, dismissal, stay lifted).

7. Not all events are reported monthly or on the date the action occurred. Servicers report the following events to VA within specified timeframes:

(a) Revision and Withdrawal. If a servicer reported an event to VA erroneously, they may only revise or withdraw the event if the event was reported directly into the SWP and is still in a pending status. Servicers cannot withdraw or revise any event once the file has been submitted either through a bulk upload spreadsheet, or through a service bureau nightly file.

(1) If a servicer reported an event erroneously, but the timeframe for revising or withdrawing an event has passed, they must contact the VA technician assigned to the loan. The VA technician will review the file to determine if cancelling the event is the correct action to take in VALERI and document the loan file. If the loan is unassigned, the servicer must contact the Regional Loan Center (RLC) of jurisdiction or the VALERI helpdesk for review and assistance.

(b) Late Reporting. For every event a servicer submits to VA, VALERI records information regarding the timeliness of the submission. An event is reported late if the servicer fails to submit the event in accordance with the VA-specified timeframe. Late reporting is a regulatory infraction that may affect a servicer's performance rating.