DOCUMENTED FACT This comment was submitted to LGYDraftingTable.VBACO@va.gov on March 11 2026, on VA's draft M26-4 Chapter 5 and Chapter 22. VA acknowledged receipt by email the same day. S006 S013

Why it is here. The Policy page compares what this comment asked for against what the June 1 2026 final policy did. That comparison is only checkable if you can read the comment. There is no public docket for this policy: it issued as handbook guidance, which 38 U.S.C. 3737(h) permits, so VA published no comment record and no response to comments. This is the only public copy of one.

PROJECT ANALYSIS Twelve, or thirteen? The comment itself says it submits "12 specific, legally grounded recommendations", meaning the twelve section-by-section items below. Its own summary list adds a thirteenth, cross-cutting ask, and elsewhere this site counts thirteen for that reason. Both counts are right; they count different things, and this page says so rather than picking one.

What was removed, and why

This is a redacted copy and the redactions are not cosmetic. Removed: the loan number, the home address, a VA internal case number, a VA OIG reference number, a personal email address, and a co-borrower's name. Also removed: every detail about a minor child. The family is publicly named, so any detail about the household resolves to one identifiable child.

Three whole sections are not reproduced: the submitter information, the case timeline, and the direct-impact section. Those are the family's own case record. They are not what makes the Policy page checkable, and the recommendations are.

Version, stated plainly. This is the author's tightened copy dated March 16 2026, five days after filing. Compared against the copy dated March 11, 194 of about 240 sentences are identical; the differences are added citation detail, not changed substance. It is not offered as a byte-exact reproduction of what VA received.

Provision Section 22.01(b): ' The authority for the Secretary to make a PC is fully discretionary and is not a home loan benefit. Nothing in this handbook is intended to limit the Secretary's discretion Congress provided under 38 U.S.C. § 3737. ' Concern While this language tracks the statute, its placement before any qualifying criteria creates a dangerous ambiguity: a servicer could read it as a basis for declining to offer the Partial Claim even when all qualifying criteria are met and the Waterfall mandates evaluation. The Secretary's discretion governs VA's payment decision — not the servicer's obligation to offer the option when criteria are met. These are distinct obligations and must be clearly separated. Recommended Clarification Add after Section 22.01(b): ' Nothing in this section relieves a servicer of the obligation to offer a VA Partial Claim when required by the Loss Mitigation Waterfall in Chapter 5. The Secretary's discretion under 38 U.S.C. § 3737 pertains to VA's payment and program administration, not to the servicer's obligation to offer the option when qualifying criteria are met. '

Provision Section 22.02(a)(1)(b): The 30% UPB cap applies where the past-due amount includes a payment missed during March 1, 2020 – May 1, 2025. Comment We strongly support this provision. The Ledford loan falls squarely within this category. We urge two clarifications: First, the 30% cap should apply where the borrower missed any payment during the COVID-era window — including a single payment — regardless of when the current default episode formally commenced. This is consistent with the statute's recognition that COVID-era arrears are distinct in scale and origin; advocacy organizations including NCLC and Urban Institute have highlighted the importance of this interpretation. Second, and critically, where a servicer's own non-compliance (such as refusing to submit to VALERI or refusing to offer Waterfall options) caused the reinstatement amount to grow beyond what it would otherwise have been, VA should have authority to calculate eligibility based on the amount that would have applied had the servicer complied. A servicer must not benefit from its own non-compliance by pointing to an inflated reinstatement amount — one it helped create by refusing to process loss mitigation — to then argue the loan no longer qualifies for the Partial Claim. Recommended Additions Add: ' For purposes of this section, the 30% limit applies where the borrower missed any payment during the period beginning March 1, 2020 and ending May 1, 2025, regardless of when the current default episode formally commenced. ' Add: ' Where a servicer's failure to comply with Waterfall requirements or submit required VALERI events contributed to the growth of the reinstatement amount, VA may, on a case-by-case basis, calculate eligibility using the reinstatement amount that would have applied had the servicer complied with its obligations. '

Provision Section 22.02(a)(9) bars eligibility if VA has previously ' paid ' a VAPCP or VASP partial claim. Comment The draft correctly limits the bar to cases where VA has ' paid ' — not where the veteran was merely eligible. This framing must be preserved and explicitly clarified. A veteran who was eligible for but excluded from VAPCP or VASP due to servicer non-submission should not be treated as having received a prior partial claim. VA should state this plainly to prevent servicers from misapplying the provision. Recommended Clarification Add: ' Eligibility for but non-receipt of a prior partial claim or VASP payment due to servicer non-submission, servicer error, or servicer failure to comply with VALERI reporting requirements does not constitute a prior payment under this section and does not affect eligibility. '

Provision Section 22.03(a)(2): ' Servicers must cease initiating, continuing, or completing foreclosures on loans where a TPP is offered to the borrower. ' Critical Gap The foreclosure halt is triggered only after a TPP is offered. The most dangerous period — between the borrower's documented request for loss mitigation and the servicer's offer of a TPP — is entirely unprotected. In our case, Freedom Mortgage never submitted to VALERI and therefore never offered a TPP. This provision never activated. The foreclosure proceeded uninterrupted through 10 months of documented loss mitigation engagement. Recommended Amendment Amend or add a companion provision: ' Servicers must cease initiating, continuing, or completing foreclosures upon: (1) receipt of a complete loss mitigation application; (2) initiation of a Waterfall review; or (3) documentation in VALERI of borrower contact requesting loss mitigation assistance — whichever occurs first. This protection is not contingent on the servicer having submitted a TPP event in VALERI. '

Provision Section 22.05 establishes VALERI reporting requirements for Partial Claim events. Critical Structural Gap The entire Partial Claim framework is VALERI-dependent. If a servicer does not submit to VALERI, nothing in this chapter activates. There is no mandatory submission timeframe, no consequence for non-submission, and no escalation pathway. This is not a hypothetical edge case — it is the documented mechanism of the Ledford foreclosure, confirmed in writing by two VA loan technicians. Under the current draft: a servicer can hold a complete loss mitigation file indefinitely without submitting to VALERI; no protections activate; no TPP is offered; no foreclosure halt applies; and the borrower has no recourse within the chapter. Section 22.08 addresses post-audit enforcement only after a Partial Claim has been processed — it does not address failure to submit. Recommended Additions Add: ' Servicers must submit the Partial Claim TPP event in VALERI within 30 calendar days of completing a Waterfall review that indicates the loan qualifies for a VA Partial Claim. ' Add: ' Failure to submit required VALERI events within the timeframes specified in this chapter constitutes a servicing deficiency subject to enforcement under Section 22.08. ' Add: ' VA technicians who receive direct borrower contact indicating a servicer has failed to submit required VALERI events must document the contact and initiate a written servicer inquiry within 10 business days. '

Provision Section 22.08(b): ' Servicers that fail to meet the requirements of this chapter may be subject to administrative enforcement action… ' Comment ' May be subject to ' is insufficient. VA technicians confirmed Freedom Mortgage's non-submission in real time for 10 months and had no mechanism that compelled action. The permissive framing of Section 22.08 means non-compliant servicers face no reliable consequence. Enforcement must be triggered by defined events, not left to discretion. Recommended Amendments Change ' may be subject to administrative enforcement action ' to ' shall be referred for administrative enforcement review ' upon defined triggers including: confirmed VALERI non-submission on a 90+ day delinquent loan; initiation of foreclosure during an open loss mitigation review; and demand for documentation not required by the Waterfall. Add mandatory escalation: ' When a VA-assigned technician confirms a servicer has failed to submit required VALERI events for a loan three or more months delinquent, the technician must notify the Loan Guaranty Monitoring Unit within 10 business days. '

Provision Section 5.01(a): ' When a borrower experiences repayment difficulty, the servicer must proceed through the numbered steps of the VA Loss Mitigation Waterfall. ' Concern ' Repayment difficulty ' is undefined. There is no mandatory timeframe for Waterfall initiation once difficulty is identified. There is no VALERI reporting obligation when a servicer reviews a loan and declines to offer any option. A servicer can allow a loan to remain delinquent indefinitely without initiating the Waterfall, with no consequence — as Freedom Mortgage did with this loan from late 2022 through January 2026. Recommended Additions Define ' repayment difficulty ' and add: ' When a loan is 60 or more calendar days delinquent, the servicer must initiate contact with the borrower and begin the Waterfall review within 15 calendar days of that threshold. ' Add: ' When a servicer completes a Waterfall review and determines no loss mitigation option is appropriate, the servicer must document that determination and its basis in VALERI within 30 calendar days. '

Provision Chapter 5 contains no explicit prohibition on dual tracking — advancing foreclosure while a loss mitigation review is active. Critical Gap 12 CFR 1024.41 (RESPA/Regulation X) prohibits dual tracking for most conventional loans. No comparable explicit provision exists in the current draft for VA-guaranteed loans. This is the gap that allowed Freedom Mortgage to initiate and advance foreclosure proceedings concurrent with a 10-month documented loss mitigation engagement. Recommended Addition Add to Section 5.02: ' Dual Tracking Prohibition. A servicer must not initiate or advance foreclosure proceedings while: (a) a complete loss mitigation application is pending review; (b) a Waterfall review has been initiated; (c) a borrower has made documented contact requesting loss mitigation assistance; or (d) a loss mitigation option has been offered and the borrower's response period has not expired. This prohibition applies regardless of whether the servicer has submitted a VALERI event. '

Provision Section 5.01(c)(2) requires borrower documentation before re-entering the Waterfall after three or more prior options were offered unsuccessfully. Comment The three-option threshold must not apply to options that were improperly denied, never offered, or never submitted to VALERI due to servicer non-compliance. A servicer must not be able to use its own failure to offer required options as a basis for making Waterfall re-entry more burdensome for the borrower. Recommended Clarification Add: ' For purposes of this section, the three-option threshold applies only to options that were properly offered in compliance with Waterfall requirements and documented in VALERI. Options improperly denied or not offered due to servicer non-compliance do not count toward this threshold. '

Provision Section 5.02(b): ' VA technicians may become involved in the loss mitigation process when: 1. Borrowers contact VA directly to request assistance… ' Comment ' May become involved ' is permissive. VA technicians Johnson and Hodges provided invaluable documentation of Freedom Mortgage's non-submission — but their acknowledgment of the problem did not trigger any mandatory response and did not stop the foreclosure. The chapter must define what technicians are required to do when borrower contact reveals servicer non-compliance. Recommended Amendments Change ' may become involved ' to ' must initiate contact with the servicer within 10 business days ' when a borrower reports the servicer has not offered required Waterfall options. Add a defined escalation protocol when a technician confirms non-submission on a 90+ day delinquent loan, including written servicer inquiry, documented response tracking, and referral to the Loan Guaranty Monitoring Unit if the servicer fails to comply.

Provision Section 5.02(c): ' Servicers must not collect financials and/or additional documents that are not outlined by VA. ' Comment We strongly support this prohibition. Freedom Mortgage demanded a full lump-sum reinstatement as a precondition for any loss mitigation discussion — precisely the conduct this section now prohibits. But without a defined consequence, the prohibition is aspirational. A servicer who violates it faces no mandatory consequence in the current draft. Recommended Addition Add: ' A servicer's demand for documentation not required under the Waterfall, or conditioning of loss mitigation review on requirements not listed in this chapter, constitutes a servicing deficiency subject to enforcement action and may constitute grounds for a finding of unauthorized foreclosure under 38 CFR 36.4319. '

Provision Section 5.10(a): ' VA authorizes servicers to advance $1,500 in relocation assistance to borrower occupants who complete a short sale or who execute a DIL. ' Comment $1,500 does not cover first month's rent and security deposit for a modest unit in most U.S. markets, including Spokane. For a household that includes a severely disabled veteran with documented housing-related medical needs, a caregiver-spouse, a dependent child, and multiple working service animals, $1,500 does not constitute meaningful relocation assistance — it is a token that bears no relationship to actual displacement costs. We recognize this figure may be floor-set by statute. We urge VA to: (1) advocate for its legislative increase; (2) issue guidance making clear that servicers may offer additional assistance above this floor at their discretion; and (3) at minimum, create a needs-based exception process for households with documented disability-related housing requirements.

— REMEDIAL GUIDANCE FOR THE H.R. 1815 IMPLEMENTATION GAP H.R. 1815 Section 3(h) (38 U.S.C. § 3737(h)) authorizes VA to issue administrative guidance before prescribing regulations for loans that were in default on the date of enactment (July 30, 2025). The draft chapters are prospective. They do not address the class of veterans whose loans were foreclosed between July 30, 2025 — when H.R. 1815 was signed — and the effective date of these chapters, during which time the law existed but no servicer implementation framework existed. That is the gap in which the Ledford foreclosure occurred. VA itself acknowledged an equivalent prior gap in Circular 26-23-25 (November 17, 2023), which imposed a foreclosure moratorium citing ' a gap in loss mitigation options. ' That precedent establishes both the authority and the responsibility to act when the framework fails. VA should use its authority under 38 U.S.C. § 3737(h) to issue separate administrative guidance specifically addressing loans foreclosed during the July 30, 2025 – [effective date of these chapters] implementation gap. This guidance should establish a review process to assess whether those foreclosures complied with 38 CFR 36.4319, and should create a remediation pathway for families displaced during a gap VA itself created by failing to issue implementation guidance for six months after H.R. 1815's enactment. Specific Requests Issue administrative guidance under § 3737(h) addressing the class of veterans foreclosed during the implementation gap period. Establish a VA review process for foreclosures completed in this window where VALERI shows no loss mitigation events were submitted by the servicer. Create a remediation pathway — including but not limited to rescission of the trustee's deed, REO repurchase at original mortgage terms, or other equitable relief — for families whose foreclosures resulted from the implementation gap and documented servicer non-compliance.

PROJECT ANALYSIS This is the ask the site counts as the thirteenth. It is cross-cutting rather than tied to one handbook section, which is why the comment's own "12 specific recommendations" line does not include it.