Announcement 19-0056: VA Funding Fee Update & IRRRL Certificate of Eligibility Requirement

July 3, 2019

Overview

The VA has implemented changes to ensure Veterans’ funding fee exemption information is up-to-date at the time of closing to avoid incorrect charges to exempt Veterans. Lenders may not advise Veteran borrowers who believe they are exempt from paying the funding fee to close on a loan without first establishing the borrower’s funding fee exemption status.

Effective immediately, a Certificate of Eligibility (COE) will be required for all VA IRRRLs to determine whether the Veteran borrower has a funding fee exemption.

For all loans (Full Doc and IRRRL) where the COE does not show the Veteran is exempt from paying the funding fee, the Veteran must answer the following questions:

  1. Does the Veteran have a claim for compensation pending with the VA?
  2. If the Veteran is an Active Duty Servicemember, does he or she have a pre-discharge claim pending?

The CMS VA Disability Questionnaire has been updated to include these questions.  The Veteran is not required to use the CMS form; however, the Veteran must provide either a completed CMS VA Disability Questionnaire or the Lender’s version of the Disability Questionnaire in a substantially similar format prior-to-docs (PTD).

If the Veteran has a claim for compensation pending with VA, an updated COE must be obtained within three (3) days of the note date using the COE “Correct” function in WebLGY.

If an Active Duty Servicemember has a pre-discharge claim pending, the Lender must contact the Regional Loan Center (RLC) immediately to request assistance in obtaining a proposed or memorandum rating in the event the Servicemember may be exempt from paying the funding fee as noted above. If a proposed or memorandum rating is not obtained and loan closing takes place, the Servicemember is not eligible for funding fee exemption.

Resources

The CMS VA Disability Questionnaire is available at Resources > Forms. Or download here.

Contacts

Please contact CorrespondentRM@carringtonms.com with any questions.

Carrington thanks you for your business.

Government Agency Approvals

FHA Non-Supervised Mortgagee Approval #:
24751-0000-5
VA Automatic Lender Approval #:
902324-00-00

Mortgagee/Loss Payee Clause

Carrington Mortgage Services LLC
ISAOA/ATIMA
P.O. Box 692408
San Antonio, TX 78269-2408

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This information is provided for your convenience and Carrington Mortgage Services, LLC makes no warranties concerning the accuracy or completeness of any of the information. This is not financial or legal advice and should not be taken as such. This information is for mortgage professionals only and is not intended for distribution to consumers.
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Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00

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