Policy

Policy. It is the policy of the VHPB that upon notification of the death of a borrower, the VHPB shall promptly identify and facilitate communication with a successor in interest of the deceased borrower with respect to the property that secures the deceased borrower’s mortgage loan. A successor in interest is a spouse, child or heir of a deceased borrower or other party with an interest in the property. To accomplish this policy, the following procedures should be followed: A. Promptly provide to any party claiming to be successor in interest; the list of documents required by the Agency for the party to establish the death of the borrower and the identity and legal interest of the successor in interest. The documents are death certificate, an executed will, or a court order determining a succession to real property. B. Upon notification of the death of a borrower, promptly identifying and evaluating any issues that the VHPB must consider in reviewing the rights and obligations of successors in interest with respect to the property and mortgage loan, including, for example: 1. Receipt of acceptable proof of the successor in interest’s identity and legal interest in the property; 2. Standing of the mortgage loan as current or delinquent; 3. Whether a trial modification or other loss mitigation option was in place at the time of the borrower’s death; 4. Whether there is a pending or planned foreclosure proceeding; 5. Eligibility of the successor in interest for loss mitigation options, and 6. Eligibility of the successor in interest to assume the mortgage loan, with or without a simultaneous loan modification or other loss mitigation option; C. Promptly providing successors in interest with information about the above issues, including any servicer prerequisites for the successor in interest to continue payment of the mortgage loan, assume the mortgage loan, and where appropriate, qualify for available loss mitigation option; D. Promptly providing successors in interest with any documents, forms, or other materials the VHPB requires for the successor in interest to continue making payments and to apply and be evaluated for an assumption and, where appropriate, loss mitigation option; E. Upon receipt from the successor in interest of required documents, forms or other materials, promptly evaluating the successor in interest for and where appropriate, implementing options set forth above; and F. Providing employees with information and training regarding the effect of laws and other requirements on the servicer’s obligations following the death of a borrower, and complying with those laws and requirements, including: 1. Servicing guidelines, such as those published by the Department of Veterans’ Affairs 2. The Garn-St. Germain Act of 1982, which imposes certain limits on the application of due-on-sale clauses when real property is transferred as a result of the death of a borrower; and 3. Federal or state law restricting the disclosure of the deceased borrower’s nonpublic personal information. G. The VHPB’s management should consider on a case by case basis if the following applies: 1. Upon notification of the death of a borrower, promptly evaluating whether to postpone or withdraw any pending or planned foreclosure proceeding to provide a successor in interest with reasonable time to establish ownership rights and pursue assumption and, if applicable, loss mitigation options; and 2. Promptly provide a successor in interest with information about the possible consequences of assuming the mortgage loan, such as any costs and the fact that a later loss mitigation option is not guaranteed if the successor in interest assumes the loan without a loss mitigation option already in place or arranged to commence simultaneously with the assumption.