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VA Circular 26-14-31 Requirement for the Transfer of Properties to VA

On October 6, the U.S. Department of Veteran Affairs (VA) issued Circular 26-14-31, subtitled Requirement for the Transfer of Properties to VA.

Circular 26-14-31

Requirement for the Transfer of Properties to VA

1. Purpose.  This Circular provides details for transferring properties to the Department of Veterans Affairs’ (VA) Property Management contractor, Vendor Resource Management (VRM).

2. Background.  In connection with the termination of VA-guaranteed loans, servicers have the option to convey to VA the properties acquired at termination.  VA accepts such properties into our inventory to be managed, maintained, and marketed by our property management contractor, VRM.  Under the same contract, VRM also provides servicing of VA’s portfolio of owned loans. Bank of America had previously been awarded both contracts separately.  VA made the decision to consolidate these two awards and recompete it as a single solicitation, now known as Real Estate Owned (REO) and Portfolio Servicing Contract (RPSC).  On April 13, 2012, VA awarded RPSC to Vendor Resource Management (VRM), http://www.vrmco.com/.  VRM is subcontracting for the servicing of VA’s loan portfolio with Residential Credit Solutions.

3. Submission of Title Documents. The address to submit title documents for new properties conveyed to VA is VRM, ATTN: VA REO – VA Title Dept., 4100 International Pkwy, Suite 1000, Carrollton, Texas 75007.  Documents must be provided no later than 60-calendar days after the liquidation sale or Deed-in-Lieu of foreclosure in most jurisdictions.  VA previously provided guidance concerning additional time for title submission in certain jurisdictions.  Timeframes for each jurisdiction may be referenced by selecting “Title Documentation and Insurance Submission, Timeframe and Documentation Requirements” link on the VA Loan Electronic Reporting Interface (VALERI) webpage (http://www.benefits.va.gov/homeloans/valeri.asp).

4. Insurance on Conveyed Properties.  VA regulation 38 Code of Federal Regulations (CFR) 36.4323(d)(2) requires servicers to request endorsements on all insurance policies in force at termination, naming the insured as the Secretary of Veterans Affairs, c/o VRM, ATTN: VA REO – VA Title Dept., 4100 International Pkwy, Suite 1000, Carrollton, Texas 75007.  In addition, information about the insurance policy should appear in the “Transfer of Custody Event” (TOC) submitted in VALERI.  Servicers should include endorsements with the title packages on properties conveyed to VA, or, if endorsements are received after title packages have already been submitted, they may be identified with the VA loan number and sent to VRM at the address in this paragraph.  Notices of cancellation on homeowners or force-placed policies may be handled in a similar manner.  If insurers cancel policies, servicers must properly account for any unearned premiums refunded by the insurer.

5. Insurance on Refunded Loans, Loans Repurchased Under 38 CFR 36.4600.  Insurance policies on loans refunded (acquired) or repurchased by VA will be endorsed to the Secretary of Veterans Affairs, c/o Residential Credit Solutions, Inc., Attn: Moses Castelo, 4708 Mercantile Drive, Fort Worth, TX 76137.  Copies of letters requesting endorsement may be included with the title packages sent to the VA Loan Technician on refunded loans.  On loans repurchased under 38 CFR 36.4600, title documents should be sent to the St. Paul Regional Loan Center.

6. Reconveyance Implications.  VA pays for a property upon receipt of an accepted TOC and then waits for acceptable title documents to be provided.  Since holders should be able to verify the validity of sales prior to conveyance, upon reconveyance of a property VA will demand reimbursement of the amount paid for the property and all expenses incurred while the property was in VA custody.  At a minimum, VA incurs expenses of $3,410 ($1,500 Service Provider Fee, $1,885 Property Preservation Flat Fee, and a $25 Tax Scrub fee) as soon as a conveyance is accepted.  Holders should be prepared to reimburse at least that amount in addition to the amount paid for conveyance of the property.  A separate Bill of Collection (BOC) will be issued to the servicer for any additional expenses incurred by VA from the acceptance of custody to the time of reconveyance (such as when an erroneous conveyance is discovered or it is determined that acceptable title documents cannot be provided).  When a BOC is not paid promptly, the amount due will be offset from subsequent payments.

7. Additional Information.  Any parties interested in contracting with VRM to provide services should direct inquiries to VRM at VRM-supplier@vrmco.com or http://prospects.vrmco.com/join.aspx to initiate the application process.  Questions for VA on property management issues may be directed to Lance.Kornicker@va.gov.  Questions for VA regarding portfolio servicing issues may be directed to Ronnie.Lamb1@va.gov.

8. Rescission:

a.  Circular 26-12-05 is rescinded immediately.

b.  This Circular is rescinded July 1, 2016.

By Direction of the Under Secretary for Benefits Michael J. Frueh
Director, Loan Guaranty Service

Please click here to view the online Circular.

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.

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties