VA Provides Clarification and Updates to Policy Guidance for IRRRLs

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In their Circular Letter 26-19-22, dated August 8, 2019, VA provided clarification and updates to policy guidance for Interest Rate Reduction Refinance Loans (IRRRLs).  Circular 2619-22 was accompanied with three exhibits one of which, Exhibit B which contained instructions and examples about determining recoupment periods for IRRRLs. 

Circular Letter 26-19-22, Change 1 noted that there were instances where lenders relied on Exhibit B specific examples without regard to the overall guidance provided in the main body of the Circular.  As a result, Circular 26-19-22 was amended in the following areas:

  • Calculating Statutory Recoupment;
  • Energy Efficient Mortgage;
  • Adjustable Rate Mortgages
  • Compliance and reporting of previously closed loans;
  • Evidence of guaranty; and
  • Removal of Exhibit B of Circular 26-19-22 in its entirety. 

It is important to note that Circular Letter 26-19-22, Change 1 did NOT rescind Circular Letter 26-19-22.  Change 1 amended and added language in 26-19-22, but only Exhibit B was removed. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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