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Federal Register / Vol. 86, No. 102 / Friday, May 28, 2021 / Rules and Regulations days to 120 days post-forbearance as explained below, this final rule notice sets a new sunset date of October 28, 2022. In establishing this date, VA notes that June 30, 2022 is the last date on which VA expects a veteran to exit a COVID19 forbearance. Given that a servicer will now have 120 days from the date a veteran exits a COVID19
forbearance to request a partial claim, October 28, 2022 will be the deadline for servicers to request a partial claim.
VA notes that if there are additional extensions of forbearance periods in VAs home loan programs, VA may consider a new rulemaking to adjust the sunset date.
VA does not agree at this time to commit to accepting partial claim requests for at least 15 months beyond the date the COVID19 national emergency ends. As the proposed rule explained, the COVIDVAPCP is intended as a temporary program.17
Thus, it is reasonable for VA to set a program sunset date that, at the time of this writing, aligns with federal guidance signaling that COVID19
forbearances should end by June 30, 2022. Also under that guidance, servicers must assist veterans in bringing their loans current as they exit COVID19 forbearances. While VA, the servicer, and the veteran may undertake certain actions after the 120-day deadline, the servicer will need to make a decision about what home retention option is in the veterans financial interest close to the time when the veterans forbearance ends. Such actions will be necessary to assist veterans regardless of whether the COVID19
national emergency is still in effect.
F. 90-Day Timeline To Submit Partial Claim Payment Request 38 CFR
36.4805a In the proposed rule, VA requested comments as to whether the servicers 90-day deadline as proposed by 36.4805 to submit the request for partial claim payment is reasonable. 18 VA also requested comments on whether there is a more reasonable timeframe.
Only three commenters specifically responded to VAs question. One commenter suggested that servicers should be given 12 months after the end of the COVID19 national emergency within which to complete an evaluation of the veterans post-forbearance options and submit a request for partial claim payment. The commenter noted that servicers will need unquantifiable additional time and resources to 17 85
18 85

FR 79142 Dec. 9, 2020.
FR 79142, 79154 Dec. 9, 2020.

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address the significant numbers of borrowers exiting forbearance in 2021
and that time would be needed to engage in thoughtful review of every individuals financial situation and identify the most suitable path to cure.
Another commenter indicated that a longer time period could be necessary due to unforeseen delays in communicating with the veteran or in trying other loss-mitigation options first, such as a trial loan modification. In consideration of these realities, the commenter suggested that VA require servicers to request a partial claim 90
days from the final loss mitigation option being fully evaluated prior to consideration of COVIDVAPCP.
The third commenter indicated that the 90-day timeframe was too short considering the burdens associated with the financial evaluation and additional paperwork and certifications. The commenter suggested that 180 days was more reasonable, especially if VA chose not to streamline the COVIDVAPCP to mirror FHAs less burdensome program.
Additionally, other commenters communicated general concerns with the significant operational costs and delay associated with executing VAs proposed rule. As previously discussed, several commenters were concerned that participating in the COVIDVAPCP
was, in most cases, more work for servicers than other traditional VA
home retention options. Such comments did not specifically address or mention VAs proposed 90-day timeframe for servicers to execute and submit a request for partial claim payment.
However, the commenters implied that VAs timeframe was not feasible given the increased burden associated with the COVIDVAPCP.
VA Response: VA agrees in part and is adjusting the requirement that servicers execute and submit a request for partial claim payment. Rather than the requirement being not later than 90
days after the veteran exits the COVID
19 forbearance, VA is extending it to not later than 120 days after the veteran exits the COVID19 forbearance. FHA
recently increased from 90 days to 120
days the timeframe in which a servicer must complete a partial claim option for borrowers affected by COVID19.19
Because VA has streamlined the process to align more squarely with FHA, VA
believes that servicers should have a
similar timeframe to request a partial claim payment from VA.
As to the suggestion that VA should allow servicers to submit a request for up to 12 months after the national emergency ends, VA believes that the end of the veterans forbearance period, as opposed to the end of the national emergency, is the more appropriate starting point. As mentioned above, VA
believes the key is to act quickly for veterans who are exiting their COVID
19 forbearances. Moreover, VA
acknowledges that servicers will be processing many cases where borrowers exit forbearance in the coming year.
This upcoming influx of cases is one of the primary reasons that VA is streamlining the COVIDVAPCP
process. VA believes that streamlining the process will lessen servicers workload in evaluating, executing, and requesting a partial claim payment.
Regarding the comment that VA start the 90-day period from the date the servicer evaluates the final loss mitigation option . . . before consideration of the COVIDVAPCP, it appears that the commenter may have understood the proposed rulemakings last resort characterization as a requirement that servicers should attempt several home retention options and that all such options must fail before servicers can resort to the COVIDVAPCP.20
VA did not intend to imply that servicers should test other home retention options and only arrive at the COVIDVAPCP if such measures fail.
Regardless, as explained in this final rule notice, VA is extending the submission timeframe from 90 to 120
days and is eliminating the last resort characterization, allowing instead for servicers to consider a partial claim option in the same way a servicer may consider any of VAs other home retention options. VA believes these changes have addressed the commenters concerns.

19 See HUD Mortgagee Letter 202105. Extension of Single Family Foreclosure and Eviction Moratorium, Start Date of COVID19 Initial Forbearance, and HECM Extension Period;
Expansion of COVID19 Loss Mitigation Options, Feb. 16, 2021, https www.hud.gov/sites/dfiles/
OCHCO/documents/2021-05hsgml.pdf.

20 The commenter explained that, . . . some options could require a borrower to make trial payments for a 90-day period before finalizing a modification. If the servicer must wait out the trial period to ensure that the COVIDVAPCP is indeed the option of last resort, it places both the Veteran and the servicer in a difficult situation.

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G. Taxes and Insurance Premiums 38
CFR 36.4805
In the proposed rule, VA requested comments regarding VAs proposal to limit inclusion of taxes and/or insurance amounts due and paid by the servicer, on the veterans behalf, in the case of a veteran who pays real estate taxes and/or insurance premiums directly to a tax authority or insurance
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