VA issued Circular 26-24-12 to announce a targeted foreclosure moratorium on VA-guaranteed loans. Per the Circular, servicers are encouraged to implement a targeted foreclosure moratorium on VA-guaranteed loans through December 31, 2024. The purpose of the targeted foreclosure moratorium is to give servicers time to implement the Veterans Affairs Servicing Purchase (VASP) program (described in Chapter 9 of the VA Servicer Handbook M26-4). Under the targeted moratorium, servicers may not initiate, continue and/or complete a foreclosure unless:
- The loan is secured by property that is vacant or abandoned;
- The servicer has documented the borrower desires neither to retain homeownership nor avoid foreclosure;
- The servicer has not received a monthly payment for at least 210 days, and the borrower is not responding to the servicer’s outreach attempts; or
- The servicer has evaluated the borrower for all home retention options but has determined that no home retention option, including VASP, or alternative to foreclosure will work for the borrower.
Note that, servicers may begin implementing the VASP program beginning May 31, 2024, and must fully implement the VASP program no later than October 1, 2024. The Circular went into effect May 29, 2024.
Click to view the VA Circular 26-24-12: https://www.tenaco.com/wp-content/uploads/2024/06/VA-Circular-26-24-12-05-30-24.pdf
