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Federal Register / Vol. 86, No. 102 / Friday, May 28, 2021 / Rules and Regulations
VA Response: VA agrees with the commenter that swift implementation of the COVIDVAPCP is necessary.
However, VA believes that consideration of public comments is crucial to ensure that the program is tailored to meet veterans needs. VA has worked to finalize this rule as quickly as possible and, as discussed further below, is setting an effective date in consideration of the fact that veterans now have increased opportunities to receive COVID19 forbearances and that servicers will require some lead time to prepare for implementation.
Finally, VA received two comments regarding existing home retention and loan servicing policies. One of these comments was that VA should clarify whether the VA option to purchase a guaranteed loan upon a borrowers default a process VA commonly refers to as a loan refund 28 occurs before a short sale or deed in lieu of foreclosure, or before a servicer initiates a foreclosure. Another commenter suggested that VA revise a monthly payment reduction requirement associated with VAs Streamline Modification option.
VA Response: VA declines to respond to these comments as they are beyond the scope of this rule.
III. Clarifying Amendments to the Final Rule Based on Comments In addition to the changes discussed above, VA is adopting the following revisions to address technical issues that arose when considering comments.
A. Definitions 38 CFR 36.4801
In the proposed rule, VA proposed a definition of CARES Act forbearance to mean forbearance of scheduled monthly guaranteed loan payments, as granted to a veteran under section 4022
of the Coronavirus Aid, Relief, and Economic Security Act Pub. L. 116
136. At that time, VA only referenced forbearance periods granted to a veteran under section 4022 of the CARES Act.
The purpose of the COVIDVAPCP
was not to limit assistance to the protections afforded under the CARES
Act, but instead to establish a temporary program to help veterans who are experiencing financial hardship due, directly or indirectly, to the COVID19
national emergency.29 As noted above, the COVID19 national emergency has now entered its second year. In consideration of the fact that the pandemic has imposed a prolonged 28 38

CFR 36.4320.
proposes to initiate a temporary program that would establish a partial claim option to aid veterans who suffer financial hardship due to COVID19. 85 FR 79142 Dec. 9, 2020.
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financial hardship for many individuals, VA has been part of the coordinated federal response that extends protections for borrowers with federally backed mortgages.30 For example, certain veterans can now receive COVID19 forbearances that can remain in effect until as late as June 30, 2022.
Additionally, certain veterans who may have already reached the end of their initial periods of forbearance can now receive up to two additional threemonth COVID19 forbearance periods, which can remain in effect until as late as December 31, 2021. To ensure it is clear that veterans who receive COVID
19 forbearances can take advantage of the COVIDVAPCP, VA is replacing the term CARES Act forbearance with COVID19 forbearance and adding a sentence clarifying that this term can include any forbearance of scheduled monthly guaranteed loan payments, granted to a veteran for a financial hardship due, directly or indirectly, to the COVID19 national emergency. For consistency, VA is also changing the term CARES Act indebtedness to COVID19 indebtedness in the final rule. The definition remains unchanged but for replacing CARES Act forbearance with COVID19
forbearance.
B. Guaranteed Loans Made On or After March 1, 2020 38 CFR 36.4803a In the proposed rule, 36.4803a stated that the loan for which a partial claim payment is requested must be a guaranteed loan that was, on March 1, 2020, either current or less than 30
days past due. The implication could be that VA meant for the rule to exclude from the COVIDVAPCP veterans who obtained new guaranteed loans on or after March 1, 2020. This is not what VA
intended. Therefore, to ensure that the text of the final rule leaves no doubt that such veterans can receive assistance under the COVIDVAPCP, VA is implementing a technical change to 36.4803a. The revised text now expressly allows veterans whose guaranteed loans were made on or after March 1, 2020 to receive COVID
VAPCP assistance, provided all other requirements are met.
30 See Fact Sheet: Biden Administration Announces Extension of COVID19 Forbearance and Foreclosure Protections for Homeowners, Feb.
16, 2021, https www.whitehouse.gov/briefingroom/statements-releases/2021/02/16/fact-sheetbiden-administration-announces-extension-ofcovid-19-forbearance-and-foreclosure-protectionsfor-homeowners/. See also VA Circular 262104.
Approving Forbearance Requests for Veterans Affected by COVID19, Feb. 16, 2021, https
www.benefits.va.gov/HOMELOANS/documents/
circulars/26_21_04.pdf.

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C. Additional Technical Edits 38 CFR
36.4805e3ii and e4
In the proposed rule, 36.4805e3ii stated that the servicer must include if applicable, all scheduled monthly payments comprising principal, interest, and escrow payments for real estate taxes and insurance premiums that were missed after March 1, 2020, but before the veteran was granted the CARES Act forbearance.31 The purpose of this paragraph was to allow individuals who may have been late in requesting forbearance under the CARES Act, but nevertheless missed their guaranteed loan payments due to circumstances related to the COVID19 national emergency, to include such amounts in the partial claim, provided the guaranteed loan was current or less than 30 days past due on March 1, 2020.32
VA is amending this section in the final rule to add on or before the phrase after March 1, 2020. VA
believes this technical change is necessary because most mortgage payments are due on the first of each month, meaning the original text might have inadvertently excluded a payment that a veteran missed on March 1, 2020.
This revision will also promote consistency with the final version of 36.4803a1, which limits the program, in relevant part, to cases where the guaranteed loan was current or less than 30 days past due on March 1, 2020.
Moreover, VA believes that because the COVIDVAPCP is designed to mitigate the effects of the COVID19 national emergency, which is effective as of March 1, 2020, it is prudent to allow for the possibility that a payment missed on that date could be included in the partial claim amount.
The need for this technical amendment is even clearer when considering that the CARES Act was signed into law by the President on March 27, 2020. It is highly likely that some veterans had already been affected by the pandemic on March 1, 2020, and thus could not make their mortgage payment. Such veterans may not have called their servicer to request a COVID19 forbearance until, for example, April 1, 2020, that is, the date the April payment was due. In such cases, the guaranteed loans would have been less than 30 days past due on March 1, 2020. However, the text of the proposed rule would have prohibited servicers from including such a payment because it was missed on 31 85

FR 79142, 79160 Dec. 9, 2020.
85 FR 79142, 79150 Dec. 9. 2020.

32 See
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