Change Date

September 15, 2004, Change 4

·  This section has been changed to create subsection lettering.

·  Subsection a clarify the veteran’s statement and the lender’s certification disclosures.

·  Subsection c deletes references to funding fee forms no longer in use.

a. Prior Approval Submission

Any IRRRL made to refinance a loan that will be 30 days or more past due as of the date of closing, must be submitted for prior approval.

The lender must first obtain sufficient information and perform sufficient analysis to determine that the

·  cause of the delinquency has been resolved, and

·  veteran is willing and able to make the proposed loan payments.

Submit a written proposal to VA which contains the following information

Item

Information

1

The full name of the veteran and all other parties obligated on the prior loan and to be obligated on the new loan.

2

The VA loan number and month and year of origination of the loan to be refinanced.

3

The name and address of the lender proposing to make the loan.

4

The approximate proposed loan amount, interest rate, and term for the new loan versus the old loan.

5

Discount to be charged, expressed as a percentage of the loan and a dollar amount.

6

Statement signed by the veteran acknowledging the effect of the refinancing loan on the veteran’s loan payments and interest rate.

·  The statement must show the interest rate and monthly payments for the new loan versus that for the old loan. 

·  The statement must also indicate how long it will take to recoup ALL closing costs (both those included in the loan and those paid outside of closing).