VA Proposes to Amend Loan Reporting Requirements
What: On November 20, 2024, the Department of Veterans Affairs (VA) published a proposed rule to amend its loan reporting requirements for lenders that participate in the VA-guaranteed home loan program. The proposed rule would also amend the circumstances when the VA would assert a defense for partial or total loss of guaranty or insurance for lenders and holders.
The proposed regulatory changes would update and enhance the loan guaranty reporting requirements for lenders, providing veterans stronger protections against noncompliant loans through improved transparency and oversight of the program. VA acknowledges that lenders would need to upgrade their loan origination system (LOS) software to comply with the new reporting procedures. The VA has not fully assessed potential pass-down costs associated with the proposed rule.
Why: The proposed rule cites a number of changes, including but not limited to:
- Increased oversight capabilities and authorities allowing the VA to review 100% of guaranteed loans for policy conformance;
- Automated loan reporting activities from application to funding managed by the lenders’ LOS;
- A newly created Guaranty Remittance Application Programming Interface (API), proposed to be a one-step process for lenders, through their LOS, to remit the funding fee, report the loan, and request the loan guaranty.
VA invites comments on the assumptions and methodology used to estimate the economic impacts of this proposed rule to ensure a thorough evaluation at the final rule stage. Advocacy seeks feedback on how this rule would economically impact small entities that participate in VA loan programs and any regulatory alternatives that would minimize impact.
Action: Comments are due to VA before January 21, 2025.
Read the VA Proposed Rule and the VA Regulatory Impact Analysis.
Advocacy contact: Send an email to Will Purcell at Will.Purcell@sba.gov.