The VA has issued an update to Circular 26-20-10, concerning loan guaranty certificates for borrowers affected by COVID-19.
The VA had previously issued Circular 26-20-10 to provide guidance related to: (i) income verification; (ii) loan underwriting; (iii) electronic mortgages, electronic notes and the use of allonges; (iv) lien positions; and (v) the timeline to request evidence of guaranty.
The recently issued update to Circular 26-20-10 relates to the timeline to request evidence of guaranty, a loan guaranty certificate. The original circular recognized that lenders may experience delays in requesting the loan guaranty certificate in WebLGY within 60 days of closing, as required. The circular instructs lenders to upload a justification indicating that such a delay was COVID-19 related and reminds lenders to remit funding fees within 15 days of loan closing. The updated guidance adds a clarification that loans made by lenders with automatic authority are already guaranteed at closing and do not require any additional actions by the lender as they relate to the loan guaranty certificate.