Letter to VA on the Proposed Updates to the VA Servicer Handbook

To Whom it May Concern:

The American Bankers Association (ABA) appreciates the opportunity to provide comments on the Department of Veteran Affairs' (VA) proposed updates to the VA Servicer Handbook, including revisions to Chapter 5 on Loss Mitigation and the creation of Chapter 22 on the new Partial Claims program.

ABA represents the majority of banks operating in the United States. Collectively, these institutions service a significant share of VA-guaranteed mortgage loans nationwide. Our members strongly support the VA Home Loan Guaranty Program and share the VA's goal of ensuring that veteran borrowers have access to effective and sustainable loss mitigation options that promote home retention whenever possible.

ABA offers the following comments and recommendations on the draft policy updates. Our comments are also reflected in the Stakeholders Feedback Worksheet provided in the VA’s drafting table instructions.

Summary of Comments

ABA strongly supports the VA's efforts to modernize the VA Home Loan Guaranty Program and implement the new Partial Claim authority authorized by Congress. Partial claims are a well-established loss mitigation tool across federal housing programs and can provide an effective mechanism to restore delinquent loans to performing status while maintaining borrower affordability. However, several aspects of the draft policies would benefit from clarification or revision to ensure the program operates effectively and aligns with the proposed servicer advance model.

Download the comment letter to read the full text.