VA Circular 26-17-16: Award of VA Property Management and Servicing Contract
June 29, 2017
1. Purpose. This Circular provides details concerning the award of the U.S. Department of Veterans Affairs (VA) Real Estate Owned (REO) and Portfolio Servicing Contract (RPSC) to Vendor Resource Management (VRM), and operational matters related to VA’s REO and direct loan portfolio, also known as VA’s National Portfolio.
2. Background. In connection with the termination of loans guaranteed by VA, servicers have the option to convey to VA the properties acquired at liquidation sales. VA manages these properties (known as REO) thru disposition, which includes management, marketing, and disposition activities. VA has often sold those acquired properties with seller loan financing, known as the vendee loan, which required loan servicing by VA. In addition, VA has, from time to time, acquired or refunded VA-guaranteed loans from private servicers in order to modify the loans at terms beyond the capability of the private servicers so that Veteran borrowers will be able to retain their homes. These loans are known as repurchase (4600 or loans repurchased under 38 CFR 36.4600) loans and refunded loans, respectively. VA also makes direct loans to Native American Veterans on trust lands under the Native American Direct Loan (NADL) program. Beginning in 1997, VA contracted for the servicing of its loan portfolio, and in 2003, VA similarly began contracting for the management and sales of acquired properties by a private contractor. VA consolidated these two contracts in the REO (Real Estate Owned) and Portfolio Servicing Contract (RPSC) and awarded the work to Vendor Resource Management (VRM), http://www.vrmco.com/ in 2012. During this contract, VRM subcontracted Ditech Financial LLC to provide mortgage servicing of the National Portfolio. This contract was also amended to facilitate a pilot whereby a portion of USDA properties are managed under this award. VA recompeted RPSC as a contract of up to 10 years, which was subsequently awarded to VRM on June 1, 2017, with an effective date of July 1, 2017. VRM has continued the subcontracting relationship with Ditech Financial, LLC which will continue providing mortgage servicing of VA’s National Loan Portfolio.