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Financial Services Law Insights and Observations

VA encourages loan holders to extend relief to borrowers impacted by California wildfires

Federal Issues Department of Veterans Affairs Disaster Relief Mortgages

Federal Issues

On November 15, the Department of Veterans Affairs (VA) issued Circular 26-18-26, requesting relief for homeowners impacted by the California wildfires. Among other things, the Circular encourages loan holders to (i) extend forbearance to borrowers in distress because of the wildfires; (ii) establish a 90-day moratorium from the date of the disaster on initiating new foreclosures on affected loans; (iii) waive late charges on affected loans; and (iv) suspend reporting affected loans to credit bureaus. The Circular is effective until October 1, 2019. Mortgage servicers and veteran borrowers are also encouraged to review the VA’s Guidance on Natural Disasters.

Find continuing InfoBytes coverage on disaster relief here.

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