VA Servicer Handbook M26-4 Chapter 21
VA Servicer Handbook M26-4 Chapter 21, verbatim from VA KnowVA (article 554400000314392, updated Dec 16, 2025).
Verbatim regulatory text
Verbatim provisions from VA Servicer Handbook M26-4 Chapter 21 — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
VA Servicer Handbook M26-4 Chapter 21 — 21.01
21.01 DISASTERS a. This chapter addresses Department of Veterans Affairs (VA)guaranteed home loans affected by a Federal Emergency Management Agency (FEMA)disaster such as flooding, tornado, storms, etc., including ecological, orother human-made disasters, and provides guidance on what actions should betaken to assist the affected borrowers. Affected borrowers are consideredthose borrowers whose homes were damaged, or destroyed, the families of thoseimpacted, those who suffered considerable personal injury, those who provideassistance to impacted family members, and those whose work environments weredestroyed, severely damaged, or compromised as a result of the disaster. Servicersmust check with FEMA to obtain the specific counties included in the federally-declareddisaster area, and corresponding declaration dates, along with any amendmentsto the declaration, at www.fema.gov/disasters. Any VA loan whichclosed prior to the date of the declared disaster is eligible for VA lossmitigation options. Please see Title 38, Code of Federal Regulations (C.F.R.),section 36.4329 (Hazard Insurance), regarding insurance coverage for propertieswhich may have been damaged, or destroyed by the disaster.
VA Servicer Handbook M26-4 Chapter 21 — 21.02
21.02 BORROWER ASSISTANCE a. VA encouragesservicers of guaranteed loans to extend all available options to borrowers indistress as a result of a disaster. Responsible counseling with borrowersshould help determine whether the delinquency is related to a disaster, orwhether it stems from other sources that must be addressed. The proper use ofauthorities granted in VA regulations may be of assistance in appropriatecases. For example, 38 C.F.R. 36.4311 (Prepayments), allows the reapplicationof prepayments to cure, or prevent a default. This means that if a borrowerhas made enough additional pre-payments, the pre-payments may be reversed, theprincipal balance increased up to the scheduled balance, and then pre-paymentsmay be re-applied as regular installments. Also, 38 C.F.R. 36.4315 (loanmodifications), allows the terms of any guaranteed loan to be modified without theprior approval of VA, provided certain conditions in the regulation aresatisfied. b. Members of the National Guard may be called to active dutyto assist in recovery efforts. VA encourages servicers to extend specialforbearance to National Guard members who experience financial difficulties asa result of their service.
VA Servicer Handbook M26-4 Chapter 21 — 21.03
21.03 MORATORIUM ON FORECLOSURE a. Although the loan servicer isultimately responsible for determining when to initiate foreclosure, andcomplete a termination action, VA requests that servicers establish a 90-daymoratorium from the date of a disaster on initiating new referrals to foreclosureon affected loans. VA regulation 38 C.F.R. 36.4324(a)(3)(ii) allows additionalinterest on a guaranty claim when termination has been delayed due tocircumstances beyond the control of the servicer, such as VA-requestedforbearance. The servicer should notify the VA-assigned technician offorbearance due to a disaster so the technician can identify that loan in theVA Loan Electronic Reporting Interface (VALERI) to ensure interest is adjustedaccordingly. Any questions about impact should be discussed with the VA-assigned technician. b. Whena loan becomes 61 days delinquent, and the delinquency is due to the disaster,servicers should use the Reason for Default of “Casualty Loss.” Inspectionsshould be completed, per VA requirements, prior to day 60 of delinquency.
VA Servicer Handbook M26-4 Chapter 21 — 21.04
21.04 VA CONVEYANCE AFTER DISASTER TheTransfer of Custody (TOC) event must be submitted to VA within 15-days of loantermination. If a disaster occurs prior to VA accepting the TOC, the serviceris required to obtain a new appraisal to reflect the current value of theproperty, so that any damages due to the disaster can be taken intoconsideration. Servicers are also required to take appropriate action in filingan insurance claim, and must advise VA of the amount received in insurance lossproceeds, if any.
VA Servicer Handbook M26-4 Chapter 21 — 21.05
21.05 VA DISASTER LOAN MODIFICATION a. There are two modification options for borrowers who havebeen impacted by a federally-declared disaster, the VA Disaster Loan Modification and the Disaster ExtendModification. The modifications allow servicers to extend payment relief toimpacted delinquent borrowers when the borrower has not submitted a completeloss mitigation application. All impacted borrowers should have an opportunityto be considered for a VA Disaster Loan Modification as long as eligibilityrequirements are met. b.Refer to Chapter 5 of this handbook for more information on the disaster loanmodification programs and eligibility requirements.
VA Servicer Handbook M26-4 Chapter 21 — 21.06
21.06 LATE CHARGE WAIVERS a. VA isaware that many servicers waive late charges on loans in a disaster area, andencourages all servicers to adopt such a policy for any loans that may havebeen affected due to the ripple effect of the disaster.
VA Servicer Handbook M26-4 Chapter 21 — 21.07
21.07 CREDIT AND VA REPORTING a. VA urgesservicers to consider suspension of credit reporting on borrowers who have beenaffected by a disaster to avoid damaging credit records. b. VAwill not penalize servicers for any late default reporting as a result of thedisaster. This may include direct damage to servicer facilities located in thedisaster area, or their operations which have been impacted by businesspartners within the disaster areas.
Operationalizing VA Servicer Handbook M26-4 Chapter 21
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Source of record: https://claudeforcompliance.com/regs/va-m26-4-ch21/
· register va-m26-4-ch21 · Claude for Compliance. Free to read and download;
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