The Department of Veterans Affairs has issued more than $400 million in refunds to veteran mortgage borrowers who were incorrectly charged loan funding fees.
The refunds come after a multi-year internal review of millions of VA loans spanning nearly two decades, the VA said.
“VA staff worked diligently through the summer reviewing 130,000 cases, which is an average of 16,000 loans per week,” said VA Secretary Robert Wilkie. “This effort included loans dating back nearly 20 years. Our administration prioritized fixing the problems and paid veterans what they were owed.”
The VA’s Loan Guaranty Service program identified more than 130,000 loans potentially due a refund. Some funding fees were charged incorrectly due to clerical errors, but more of the incorrect fees were charged to veterans whose exemption status changed following the issuance of a disability rating following the closure of their loan. Disabled veterans are exempt from the VA funding fee.
The VA said that it has made several changes to provide veterans and lenders with up-to-date information on funding-fee exemptions. The changes include:
- Enhancements to veteran-focused communications to better inform about the finding fee and when it may be waived
- Policy guidance directing lenders to inquire about a veteran’s VA disability claim status during the underwriting process and obtain an updated certificate of eligibility no more than three days prior to loan closing if the veteran has a disability claim pending
- System and procedural changes to ensure regular internal oversight activities quickly identify veterans eligible for fee waivers and refunds
Veterans who believe they are entitled to a refund of the funding fee should call their VA Regional Loan Center at 877-827-3702 to find out if they are eligible.