The VA has released Circular 26-08-8 titled, "Loan Modifications Under VALERI".

Circular 26-08-8 clarifies  the applicable maximum interest rate and new requirements when modifying a loan under the new VA Loan Electronic Reporting Interface (VALERI) environment.

Under the existing VA regulation, loan holders are not allowed to increase the interest rate on a loan that is being modified.  Regulation specifically states that interest in excess of the rate reported by the lender when requesting evidence of guaranty shall not be payable.  Furthermore, the guaranty amount does not increase when the modified loan amount is greater than the original loan amount.  In contrast, the new regulation relating to loan modifications in the VALERI environment, provides for an increase to the guaranty amount on a modified loan.  It also allows for an increase or decrease in the interest rate on a loan being modified when market conditions dictate (with an appropriate exception in 38 CFR 36.4812(c) to allow the increased interest rate). 

To view the Circular in its entirety, 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 500 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.