The VA is in the process of publishing revisions to each chapter of their “Lender’s Handbook” (see https://compliance.docutech.com/2019/02/13/compliance-news-va-planning-to-rescind-outstanding-circulars/ for details) and, on July 30, 2019 they revised Chapter 9 (“Legal Instruments, Liens, Escrows, and Related Issues”).
Among other changes, the VA has tweaked the wording of the acceleration, funding fee, processing charge, and indemnity liability assumption clauses (see VA Lender’s Handbook ch. 9, 1-c), which we include in our security instruments as a rider in “VA Rider Assumption Policy” (Cx53). The VA has also tweaked the wording in the “alive status” certification, which we provide in “Lender’s Certification of Veteran Alive at Time of Closing” (Cx16760; see Ibid. ch. 9, 8-c for the changes).
Following our policy to match model language, we will be updating Cx53 and Cx16760 to conform with the new wording promulgated in revised Chapter 9.
Please note that the VA has also modified their “escape clause” language found in Ibid. ch. 9, 2-d, which we provide in “VA Amendment to Sales Contract” (Cx14284). The lone modification is the removal of the word “Authority” in the parenthetical legal citation. However, this clause is also promulgated under 38 C.F.R. § 36.4303(k) and it has not been modified in a similar manner. Where there is a conflict in model form language between two or more legal sources which cannot be reconciled, our policy is to use the language from the more authoritative source which, in this case, is the administrative law (which takes precedence over Federal agency policy manuals). Thus, Cx14284 will not be modified and will continue to match the language under 38 C.F.R. § 36.4303(k).
These changes will take effect on August 15, 2019. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.