[Federal Register Volume 86, Number 213 (Monday, November 8, 2021)]
[Notices]
[Pages 61856-61858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24330]


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DEPARTMENT OF VETERANS AFFAIRS


Loan Guaranty: Maximum Allowable Fees for Legal Services

AGENCY: Department of Veterans Affairs.

ACTION: Notice.

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SUMMARY: This notice provides updated information to participants in 
the Department of Veterans Affairs (VA) Home Loan Guaranty program 
concerning the maximum allowable fees for legal services performed in 
connection with the foreclosure of single-family housing loans. This 
notice also provides updated information concerning the legal fees for 
bankruptcy-related services. The table in this notice contains the 
amounts the Secretary has determined to be reasonable and customary in 
all states, following an annual review of the amounts allowed by other 
Government-related home loan programs.

DATES: The new maximum allowable fees for legal services will be 
allowed for all guaranty claims submitted to VA on or after December 8, 
2021.

FOR FURTHER INFORMATION CONTACT: Mr. Andrew Trevayne, Assistant 
Director for Loan and Property Management, Loan Guaranty Service (261), 
Veterans Benefits Administration, Department of Veterans Affairs, 810 
Vermont Avenue NW, Washington, DC 20420, (202) 632-8795. (This is not a 
toll-free number.)

SUPPLEMENTARY INFORMATION: The VA Home Loan Guaranty program authorized 
by title 38, United States Code, chapter 37, offers a partial guaranty 
against loss to lenders who make home loans to Veterans. VA regulations 
concerning the payment of loan guaranty claims are set forth at 38 CFR 
36.4300, et seq. Computation of guaranty claims is addressed in 38 CFR 
36.4324, which states that one part of the indebtedness upon which the 
guaranty percentage is applied is the ``[a]llowable expenses/advances 
as described in [38 CFR 36.4314].'' 38 CFR 36.4324(a)(2). Section 
36.4314(b)(5)(ii) describes the procedures to be followed in 
determining what constitutes the reasonable and customary fees for 
legal services performed in connection with the foreclosure of single-
family housing loans.
    Pursuant to Sec.  36.4314(b)(5)(ii), the Secretary is required to 
annually review allowances for legal fees in connection with the 
foreclosure of single-family housing loans, including bankruptcy-
related services, issued by the Department of Housing and Urban 
Development (HUD), the Federal National Mortgage Association (Fannie 
Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). In 
March 2021, Fannie Mae issued revisions to their allowances for legal 
fees. Fannie Mae, Allowable Foreclosure Attorney Fees Exhibit, 
Servicing Guide (March 10, 2021), https://servicing-guide.fanniemae.com. The following month, HUD announced its plans to 
adopt Fannie Mae's fee structure by August. HUD, National Servicing 
Center Single Family Housing Policy Handbook 4000.1 Section III: 
Servicing and Loss Mitigation Key Changes (April 22, 2021), https://www.hud.gov/sites/dfiles/SFH/documents/sfh_hb_4000_1_sect_3_serv_loss_mit_04_22_21.pdf. Freddie Mac has also 
announced new allowances for legal fees, effective September 27, 2021. 
Freddie Mac, Approved Attorney Fees and Title Expenses, Seller/Servicer 
Guide Exhibit 57A (September 27, 2021), https://guide.freddiemac.com/app/guide/exhibitRev/57A,09-27-2021.
    VA has reviewed and considered the legal fees allowed by each 
entity. Based on increases in fees for legal services announced by 
these Government-related home loan programs, the Secretary is 
publishing in the Federal Register a table setting forth the revised 
amounts the Secretary has determined to be reasonable and customary. 
The table reflects the primary method for foreclosing in each state, 
either judicial or non-judicial, with the exception of those states 
where either judicial or non-judicial is acceptable. The use of a 
method not authorized in the table will require prior approval from VA. 
This table will be available throughout the year at: https://www.benefits.va.gov/HOMELOANS/servicers_valeri_rules.asp.
    There has been no change to the amounts VA will allow for 
bankruptcy filing fees. However, VA is clarifying that VA allows for a 
bankruptcy filing fee regardless of whether a bankruptcy release is 
obtained. VA notes that its current regulation at 38 CFR 
36.4314(b)(5)(i) authorizes ``[f]ees for legal services actually 
performed.'' Regardless of whether a bankruptcy filing results in a 
release, legal services may have been performed in addressing the 
filing. Allowing fees for a bankruptcy filing is also consistent with 
the other Government-related home loan programs. See HUD, National 
Servicing Center Single Family Housing Policy Handbook 4000.1 Section 
III: Servicing and Loss Mitigation Key Changes (April 22, 2021), 
https://www.hud.gov/sites/dfiles/SFH/documents/sfh_hb_4000_1_sect_3_serv_loss_mit_04_22_21.pdf.; Fannie Mae, Allowable 
Bankruptcy Attorney Fees Exhibit, Servicing Guide (September 11, 2019), 
https://servicing-guide.fanniemae.com; Freddie Mac, Approved Attorney 
Fees and Title Expenses, Seller/Servicer Guide Exhibit 57A (September 
27, 2021), https://guide.freddiemac.com/app/guide/exhibitRev/57A,09-27-2021. VA will continue to monitor fees for legal services on an annual 
basis and publish updates in the Federal Register as VA deems 
necessary.
    The following table reflects the Secretary's determination of the 
reasonable and customary fees for legal services for the primary method 
for foreclosing in each state.

[[Page 61857]]



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                                                                      VA non-
                                                                     judicial       VA judicial    Deed-in-lieu
                          Jurisdiction                              foreclosure     foreclosure   of foreclosure
                                                                      \1\ \2\         \1\ \2\
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Alabama.........................................................          $1,700             N/A            $400
Alaska..........................................................           2,000             N/A             400
American Samoa..................................................           1,600             N/A             400
Arizona.........................................................           1,700             N/A             400
Arkansas........................................................           1,700             N/A             400
California......................................................           1,700             N/A             400
Colorado........................................................           2,100             N/A             400
Connecticut.....................................................             N/A           3,100             400
Delaware........................................................             N/A           2,250             400
District of Columbia............................................           1,500           2,875             400
Florida.........................................................             N/A           4,100             400
Georgia.........................................................           1,700             N/A             400
Guam............................................................           2,000             N/A             400
Hawaii..........................................................             N/A           4,500             400
Idaho...........................................................           1,450             N/A             400
Illinois........................................................             N/A           3,000             400
Indiana.........................................................             N/A           3,000             400
Iowa............................................................           1,275           2,450             400
Kansas..........................................................             N/A           2,400             400
Kentucky........................................................             N/A           3,000             400
Louisiana.......................................................             N/A           2,500             400
Maine...........................................................             N/A           3,250             400
Maryland........................................................           3,000             N/A             400
Massachusetts...................................................             N/A           3,400             400
Michigan........................................................           1,900             N/A             400
Minnesota.......................................................           1,775             N/A             400
Mississippi.....................................................           1,500             N/A             400
Missouri........................................................           1,700             N/A             400
Montana.........................................................           1,700             N/A             400
Nebraska........................................................           1,400             N/A             400
Nevada..........................................................           2,000             N/A             400
New Hampshire...................................................           1,700             N/A             400
New Jersey......................................................             N/A           4,350             400
New Mexico......................................................             N/A           4,000             400
New York--Western Counties \3\..................................             N/A           4,200             400
New York--Eastern Counties......................................             N/A           5,225             400
North Carolina..................................................           2,175             N/A             400
North Dakota....................................................             N/A           2,200             400
Ohio............................................................             N/A           3,000             400
Oklahoma........................................................             N/A           2,700             400
Oregon..........................................................           1,700           3,700             400
Pennsylvania....................................................             N/A           3,125             400
Puerto Rico.....................................................             N/A           2,700             400
Rhode Island....................................................           2,250             N/A             400
South Carolina..................................................             N/A           2,850             400
South Dakota....................................................             N/A           2,250             400
Tennessee.......................................................           1,500             N/A             400
Texas...........................................................           1,700             N/A             400
Utah............................................................           1,700             N/A             400
Vermont.........................................................             N/A           3,200             400
Virgin Islands..................................................             N/A           2,500             400
Virginia........................................................           1,700             N/A             400
Washington......................................................           1,700             N/A             400
West Virginia...................................................           1,450             N/A             400
Wisconsin.......................................................             N/A           2,500             400
Wyoming.........................................................           1,450             N/A             400
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\1\ When a foreclosure is stopped due to circumstances beyond the control of the holder or its attorney
  (including, but not limited to bankruptcy, VA-requested delay, property damage, hazardous conditions,
  condemnation, natural disaster, property seizure or relief under the Servicemembers Civil Relief Act) and then
  restarted, VA will allow a $400 restart fee in addition to the base foreclosure attorney fee. This fee
  recognizes the additional work required to resume the foreclosure action, while also accounting for the
  expectation that some work from the previous action may be utilized in starting the new action.
\2\ VA will allow attorney fees of $1,050 (chapter 7) or $1,500 (initial chapter 13) for an initial bankruptcy
  filing, regardless of whether a bankruptcy release is obtained. For multiple bankruptcy filings under either
  chapter, VA will allow an additional $500.
\3\ Western Counties of New York for VA are: Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Livingston,
  Monroe, Niagara, Ontario, Orleans, Steuben, Wayne, Wyoming and Yates. The remaining counties are in Eastern
  New York.


[[Page 61858]]

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on November 1, 2021 and authorized the undersigned to sign and 
submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Luvenia Potts,
Regulation Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.
[FR Doc. 2021-24330 Filed 11-5-21; 8:45 am]
BILLING CODE 8320-01-P