[Federal Register Volume 61, Number 37 (Friday, February 23, 1996)]
[Notices]
[Pages 7046-7047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4100]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF VETERANS AFFAIRS
Loan Guaranty: Percentage to Determine Net Value
AGENCY: Veterans Benefits Administration, Department of Veterans
Affairs.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice provides information to participants in the
Department of Veterans Affairs (VA) Loan Guaranty Program concerning
the percentage to be used in determining whether the Secretary will
accept conveyance of a foreclosed property. The new percentage is 15.11
percent.
EFFECTIVE DATE: The new percentage is effective January 22, 1996.
FOR FURTHER INFORMATION CONTACT:
Mr. Leonard A. Levy, Assistant Director for Loan and Property
Management (261), Loan Guaranty Service, Veterans Benefits
Administration, Department of Veterans Affairs, Washington, DC 20420,
(202) 273-7344.
SUPPLEMENTARY INFORMATION: VA regulations concerning the payment of
loan guaranty claims are set forth at 38 CFR 36.4300, et seq. The
formulas for determining whether VA will offer the lender an election
to convey the property to VA are set forth at 38 CFR 36.4320. A key
component of this is the ``net value'' of the property to the
Government, as defined in 38 CFR 36.4301. Essentially, ``net value'' is
the fair market value of the property, minus the total of the costs the
Secretary estimates would be incurred by VA resulting from the
acquisition and disposition of the property for property taxes,
assessments, liens, property maintenance, administration, and resale.
Each year VA reviews the average operating expenses incurred for
properties acquired under 38 CFR 36.4320 which were sold during the
preceding three fiscal years and the average administrative cost to the
Government associated with the property management activity.
Administrative cost is based on the average holding time for properties
sold during the preceding fiscal year. Property improvement expenses
are estimated on an individual case basis at the time the net value is
estimated. VA also includes in the net value calculation an amount
equal to the gain or loss experienced by VA on the resale of acquired
properties during the prior fiscal year. VA annually updates the net
value percentage and publishes a notice of the new percentage in the
Federal Register. For Fiscal Year 1995, the percentage was 11.18
percent. For Fiscal Year 1996, the percentage will be 15.11 percent,
based upon the operating expenses incurred, exclusive of estimated
property improvement expenses which are accounted for separately in
each case, for Fiscal Years 1993, 1994, and 1995, and property resale
experience for Fiscal Year 1995. Accordingly, VA will subtract 15.11
percent from the fair market value of the property to be foreclosed in
order to arrive at the ``net value'' of the property to VA. This new
percentage will be used in ``net value'' calculations made by VA on and
after January 22, 1996. This is the date the new percentage was issued
to VA filed stations for use in these calculations.
[[Page 7047]]
Approved: February 12, 1996.
Jesse Brown,
Secretary of Veterans Affairs.
[FR Doc. 96-4100 Filed 2-22-96; 8:45 am]
BILLING CODE 8320-01-M
