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VA SB 797 places additional requirements on servicers pertaining to foreclosure notification and forebearance.
The bill defines a "high-risk mortgage loan" as a loan not in bankruptcy or in active foreclosure that either has a an APR that exceeds the US Treasury Yield of comparable maturity by 5% or more, or total points and fees of greater than 7% total loan amount on the note, payable at or before closing.
The bill requires a mortgage servicer or lender to provide a written notice to the defaulting borrower at least 10 days prior to accelerating the balance due for failure to make a payment due. The notice must contain:
- An itemization of all past due amounts that create the default
- Any other charges that must be paid to bring the account current
- Advise the borrower that there may be options to avoid foreclosure that the borrower may discuss with the lender, servicer or a HUD-approved counseling agency
- The address and phone number of the lender, servicer or its agent that will attempt to work with the borrower to avoid foreclosure
- Name, address and phone number of (3) or more HUD-approved counseling agencies in VA.
- Notice reply date deadline for the borrower
- If the borrower contacts the lender/servicer on or before the date in the notice at the listed number to request additional options, the lender/servicer must give the borrower at 30 extra calendar days from the date of contact before sending a notice of acceleration
- The borrower must make a good faith effort to work with the counselor on ways to repay amounts due and avoid foreclosure and
- Provide monthly income and expenses
- If the borrower fails to contact the lender/servicer by the date in the notice, the lender/servicer may, at its option, send a notice and accelerate the loan
- This pre-acceleration notice must be sent by first class mail to the last known address at least 10 business days before the acceleration notice may be sent.
- Failure by the lender/servicer to send the 10-day notice or provide the 30 day extension prior to issuing notice of acceleration will not affect the validity of any sale under the deed of trust.
- The lender/servicer is not required to provide more than one 30-day extension to a borrower on the same loan.
To view a copy of the bill, please click here.
About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 450 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.
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