21.02 BORROWER ASSISTANCE (02/01/18)

© VA Servicers Handbook - M26-4

a. VA encourages servicers of guaranteed loans to extend all available options to borrowers in distress as a result of a disaster. Responsible counseling with borrowers should help determine whether the delinquency is related to a disaster, or whether it stems from other sources that must be addressed. The proper use of authorities granted in VA regulations may be of assistance in appropriate cases. For example, 38 C.F.R. 36.4311 (Prepayments), allows the reapplication of prepayments to cure, or prevent a default. This means that if a borrower has made enough additional pre-payments, the pre-payments may be reversed, the principal balance increased up to the scheduled balance, and then pre-payments may be re-applied as regular installments. Also, 38 C.F.R. 36.4315 (loan modifications), allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided certain conditions in the regulation are satisfied.

b. Members of the National Guard may be called to active duty to assist in recovery efforts. VA encourages servicers to extend special forbearance to National Guard members who experience financial difficulties as a result of their service.