TO:
ALL HOLDERS AND
SERVICERS
SUBJ: INSTRUCTIONS FOR TRANSFER OF PROPERTY
CUSTODY TO VA
Purpose
This
bulletin restates the recent changes to the instructions for the
transfer of property custody to the Department of Veterans Affairs
(VA) and corrects the fax number for submitting VA Forms 26-8903,
Notice for Election to Convey and/or Invoice for Transfer of
Property to VA. More importantly, it
announces a change to our policy for reimbursement of title
searches for loans in Texas. This bulletin applies to all VA loans in
Arkansas,
Louisiana,
Oklahoma, and
Texas.
Effective
Date
This bulletin is
effective immediately.
What Changed
Recently
The following
changes were effective for loans foreclosed on or after March
1, 2004:
·
Servicers and holders are no longer required to
submit a copy of the tax certificate with VA Form 26-8903, Notice
for Election to Convey and/or Invoice for Transfer of
Property. We are no longer
reimbursing servicers and holders for the cost of a tax
certificate.
·
We no longer require that a copy of the title
search for Texas loans be submitted to VA
with VA Form 26-8903.
·
VA Form 26-8903 can be e-mailed to us at
LGYFCU@vba.va.gov.
·
The new address for the Houston
RLC Web Site is http://www.vba.va.gov/houstonrlc.htm.
What About
Reimbursement For Title Searches
on Texas
Loans
This office
will reimburse holders for the actual cost of the title search on
Texas loans not to exceed
$150.00. We recognize that holders
must obtain a title search prior to foreclosure in order to insure
a valid foreclosure sale and convey properties to VA with
acceptable title. 38 CFR
36.4320(f)(2) states that the cost of obtaining evidence of title
in favor of the Secretary as specified in paragraph (h)(5) of the
same section of the regulation may be included in accounting to the
Secretary.
When Can Property
Custody Be Transferred To VA
Holders may transfer property to VA (38 CFR
36.4320) when VA specifies an amount (exact dollar figure or total
indebtedness) and the holder is the successful bidder at the
foreclosure sale or the holder accepts a deed in lieu of
foreclosure. The specified amount is
the offer made by VA for transfer of the property to VA.
When To Notify VA
Of Election To Convey
Notice of election to convey must be received within 15
days from the date of the foreclosure sale or confirmation date
or the date the deed in lieu of foreclosure is executed by the
homeowner(s). Failure to forward
Notice for Election to Convey and/or Invoice for Transfer of
Property, VA Form 26-8903, with any required attachment within 15
days after the event may result in VA?s refusal to accept custody
of the property.
How To Notify VA
? The Transfer Package
A properly completed and executed Notice for Election to
Convey and/or Invoice for Transfer of Property, VA Form 26-8903,
must be submitted. The 12 digit VA
loan identification number is required on the form. Attach a copy of the order confirming the
foreclosure sale when required or the deed executed by the
homeowners in deed-in-lieu of foreclosure
cases.
How To Obtain VA
Form 26-8903
This
office does not include a VA Form 26-8903, Notice for Election to
Convey and/or Invoice for Transfer of Property, with every
foreclosure bidding instruction letter. You may obtain a copy of the form at our
Website, http://www.vba.va.gov/houstonrlc.htm
or you may fax a request for a supply of the form to
713-794-3716. Be
sure to include the VA form number, the quantity needed, and your
complete mailing address.
How To Submit The
Transfer Package
The transfer
package may be submitted to VA via e-mail, fax, or certified
mail. E-mail or fax is
preferred.
E-MAIL: Property transfer packages may be e-mailed to
LGYFCU@vba.va.gov. Holders should retain their e-mail confirmation
reflecting that VA received the documents.
FAX: Property transfer packages may be faxed to
713-794-3814.
Holders should retain their fax confirmation reflecting that VA
received the documents.
MAIL:
When mailed, property transfer packages must be sent by
certified mail to the address below. Holders should retain the return receipt
confirming delivery of the package to VA.
Regional Loan
Center
(264)
6900 Almeda
Road
Houston,
TX
77030-4200
How to Resolve
Custody Disputes
Disputes
concerning transfer of custody to VA are resolved in favor of the
holder only when a copy of a certified mail receipt or fax or
e-mail confirmation can be provided.
The return receipt for mailed items must adequately identify the
loan account and the documents mailed and must be signed by a VA
employee. When documents are faxed or
e-mailed, the confirmation must reflect the following:
1.
the holder?s loan account number or VA?s loan
identification number
2.
the correct fax number or e-mail
address
3.
the date and time of receipt by VA
Who is
Responsible For Property Condition
It is the responsibility of the holder to preserve
and protect the property prior to transferring custody to
VA. Custody of the property is
delivered to VA upon receipt of VA Form 26-8903. At that time, VA assumes all risks of ownership,
and the holder should discontinue all property management
functions. VA does not require the property to be vacant, undamaged
or free from personal property when custody is transferred,
however, VA may refuse to accept conveyance if the property has
been substantially damaged as a result of the holder?s
negligence.
What Happens When
You Bid Too Much
The
Veterans' Benefits Improvements Act of 1994, H.R. 5244, signed into
law on November 2, 1994, permits VA to accept custody
of property when the holder overbids.
In such cases, holders may elect to convey the property to VA for
no more than the specified amount. Execution of VA Form 26-8903, Notice for
Election to Convey and/or Invoice for Transfer of Property,
constitutes the holder's acceptance of VA's offer. The holder?s claim payment may be substantially
reduced in such cases. The amount bid
at the foreclosure sale will be credited to the indebtedness when
the Claim Under Loan Guaranty is paid by VA. Holders should consider this before conveying
the property to VA for the specified amount. (Exception: In some states, a minimum bid is required under
applicable State law. In these cases,
holders are cautioned not to bid more then the minimum required by
state law. When this minimum bid
exceeds the amount specified by VA, the holder may elect to convey
the property to VA. VA will pay the
holder the amount bid at the sale or the total indebtedness,
whichever is less, instead of the specified amount. In such cases, the amount bid at the sale also
governs for the purpose of determining VA?s liability under the
loan guaranty.)
Questions And
Comments
Please e-mail
questions and comments concerning this bulletin to LGYHGALE@VBA.VA.GOV.
Rescission
This bulletin
rescinds RLC Bulletin No. 2004-1, dated January
4, 2004, on the same subject.
//s//
R. BIAGIOLI
Loan Guaranty Officer
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