VA Circular 26-13-19: VA Acceptance of Properties
On September 27, the U.S. Department of Veterans Affairs (VA) released Circular 26-13-19, subtitled Department of Veterans Affairs (VA) Acceptance of Properties.
Department of Veterans Affairs (VA) Acceptance of Properties
1. Purpose. This Circular provides guidance on requests for execution of documents related to the conveyance or reconveyance of properties to the Secretary of the Department of Veterans Affairs (VA) in order to provide more specific details to those authorized to sign documents for the Secretary, and to those who submit such documents.
2. Background. Conveyance of properties to the Secretary is addressed in Title 38, Code of Federal Regulations (CFR), section 36.4323, titled “Election to Convey Security”. This section discusses the conditions in which a loan holder or servicer that acquires a property which secured a VA-guaranteed loan at a liquidation sale, via foreclosure or through acceptance of a deed-inlieu of foreclosure, may decide to transfer the property to the Secretary. The regulation provides that the conveyance is subject to a number of provisions, particularly that the holder will convey the title to the Secretary via a special warranty deed and must provide evidence to the Secretary of acceptability of title (which need not be provided if transfer is via a general warranty deed). Thus, the fact that the VA Loan Electronic Reporting Interface (VALERI) accepts an event to report the notice of election to convey, does not mean the Secretary has actually accepted conveyance of the property until the other provisions of 38 CFR 36.4323 are satisfied.
3. Additional State Transfer Requirements. In some states, both the Grantor (seller) and the Grantee (buyer) are required to execute a transfer deed. Additionally, some states require execution of other documents by the Grantor and/or the Grantee. Sometimes these documents must accompany the transfer deed when it is submitted for recordation. Some documents are required to establish status and value for future real estate taxes, while others may relate to potential taxable income from the sale of real estate. VA will execute such documents when they are clearly in conformance with their stated purposes (e.g., to establish real estate tax value). However, in no event will VA’s execution of such a document be deemed as VA’s acceptance of a property. Furthermore, when there are questionable items shown, such as a report that a deed to VA is a deed-in-lieu of foreclosure, although such a deed should be to the loan holder, with a subsequent transfer deed to the Secretary, then VA may seek clarification prior to execution of the document.
4. California Certificate of Acceptance. Recently, VA has received requests for execution of certificates of acceptance, which are purportedly required under California Government Code, section 27281. However, that section specifically refers to transfer to a political corporation or governmental agency for public purposes. As previously stated, conveyances to VA are actually made to the Secretary as an officer of the United States, as part of a salvage operation under the Home Loan Guaranty program. Therefore, such properties do not fit this section of the California Government Code, which requires either a resolution of acceptance on the part of the political corporation, or else a certificate of acceptance substantially in the form provided in the code. Accordingly, such a certificate is not necessary. However, if a local jurisdiction demands such a form in order to record a deed involving the Secretary, then authorized VA officials will sign a certificate with the qualifying language as shown in bold in Exhibit A, which is a sample of a certificate substantially in conformance with the form provided in the code.
5. Delegated Signature Authority. Under 38 CFR 36.4345, “Delegation of Authority”, employees filling certain positions are authorized to sign documents related to real estate transfers on behalf of the Secretary. Designated positions include Loan Guaranty Officers and Assistant Loan Guaranty Officers, who are authorized to sign documents for properties nationwide. Anytime a VA employee signs a document on behalf of the Secretary, the document should include a signature block that cites the delegation of authority. Above the line for the signature should be something similar to the following “(Name of employee, position) on behalf of the Secretary of Veterans Affairs, an Officer of the United States, pursuant to the delegation of authority at 38 C.F.R. 36.4345, but subject to the limitations of 38 C.F.R. 36.4323.” This signature will describe the authority of the individual signing the document, and also serve as notice that whatever the document may state, VA retains its right to determine acceptability of title to the property and to reconvey if title is not acceptable.
6. VA Address. For any documents requiring an address for VA, use “Secretary of Veterans Affairs, an Officer of the United States of America, successors and assigns, at (insert address of VA office of geographic jurisdiction [may be different than the office of the assigned VALERI technician]).” For a listing of VA Regional Loan Center (RLC) geographic jurisdictions, and the address for the appropriate RLC to be inserted into the conveyance information in the preceding sentence, please refer to http://www.benefits.va.gov/homeloans/rlcweb.asp. If an in-state address is required in a particular state, contact the RLC of geographic jurisdiction for the address of the VA Regional Office in the state. If a personal name is required for the Secretary, use Eric K. Shinseki until there is any change in that position.
7. Rescission: This Circular is rescinded October 1, 2015.
By Direction of the Under Secretary for Benefits
Michael J. Frueh
Director Loan
Guaranty Service
Please click here to view the online Circular in its entirety.
About Safeguard
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.
