01-15069. Delegation of Authority-Portfolio Loan Servicing Contractor

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

This document delegates to certain officers of the entity performing loan servicing functions under a contract with the Secretary authority to execute all documents necessary for the servicing and termination of a loan made or acquired by the Secretary.

DATES:

Effective Date: June 14, 2001.

FOR FURTHER INFORMATION CONTACT:

Richard Fyne, Assistant Director for Loan Management (261), Veterans Benefits Administration, 810 Vermont Ave., Washington, DC 20420, telephone [phone].

SUPPLEMENTARY INFORMATION:

The provisions of 38 U.S.C. chapter 37 authorize the Secretary of Veterans Affairs (VA) to guarantee or make loans to veterans. Under a number of circumstances VA becomes the holder of a housing loan. The most common reasons are: VA acquired the property securing a guaranteed loan following foreclosure and sold the security on terms (sometimes called a “vendee loan.”), VA took an assignment of (or “refund”) a guaranteed loan pursuant to 38 U.S.C. 3732(a)(2), or VA made a direct loan to a veteran pursuant to 38 U.S.C. 3711 or 3761.

VA has contracted with a private entity for the servicing of its housing loan portfolio. In order to increase the efficiency of this contract, certain officers of the contractor are being delegated authority to execute, on behalf of VA, routine documents necessary for the servicing and foreclosing of the loans being serviced.

Currently, 38 CFR 36.4342 authorizes certain VA officials, such as field station Directors, Loan Guaranty Officers, and Assistant Loan Guaranty Officers, to execute these documents. Regional Offices are required to maintain a cumulative list of all employees of that office who have held the designated positions since May 1, 1980.

This rule adds a new paragraph (e) to 38 CFR 36.4342 which delegates to persons holding the office of Vice President, Assistant Vice President, and Assistant Secretary of the entity performing loan servicing functions under a contract with VA the authority to execute all documents necessary for the servicing and termination of a housing loan made or acquired by VA. Documents authorized to be executed will include loan modification agreements, notices of default, notices of appointment or substitution of trustees, releases or satisfactions of mortgages, loan assumption agreements, deeds tendered upon satisfaction or conversion of an installment land sales contract, and documents related to filing, pursuing and settling claims with hazard insurance companies.

The Director of the VA Loan Guaranty Service, Washington, DC, will maintain a log listing all corporate officers of the contractor who have been authorized to execute documents and the dates during which these persons were authorized to act. VA will also maintain copies of resolutions of the contractor's board of directors authorizing these persons to execute these documents. Those files will be available for public inspection and copying during normal business hours at the Office of the Director of VA Loan Guaranty Service, Washington, DC 20420.

This authority does not apply, however, with respect to loans under the pilot program for multifamily transitional housing projects for homeless veterans under 38 U.S.C. chapter 37, subchapter vi. Such loans will not be serviced by the contractor servicing the VA loan portfolio.

The provisions of 38 CFR 36.4342(e) are published without regard to the notice and comment and delayed effective date provisions of 5 U.S.C. 553 since they relate to agency management and personnel and are not substantive rules.

Paperwork Reduction Act

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Executive Order 12866

This document has been reviewed by the Office of Management and Budget under Executive Order 12866.

Regulatory Flexibility Act

The Secretary of Veterans Affairs hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The final rule relates to agency management and personnel and does not contain substantive provisions. Accordingly, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of §§ 603 and 604.

There is no Catalog of Federal Domestic Assistance number for this program.

List of Subjects in 38 CFR Part 36

• Condominiums
• Housing
• Indians
• Individuals with disabilities
• Loan programs-housing and community development
• Loan programs
• Indians
• Loan programs-veterans
• Manufactured homes
• Mortgage insurance
• Reporting and recordkeeping requirements
• Veterans

Approved: March 14, 2001.

Anthony J. Principi,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR is amended as set forth below.

PART 36—LOAN GUARANTY

1. The authority citation of part 36 continues to read as follows:

Authority: 38 U.S.C. 501, 3701-3704, 3707, 3710-3714, 3719, 3720, 3729, 3762, unless otherwise noted.

2. In § 36.4342, paragraph (e) is added immediately following paragraph (d); and the authority citation at the end of the section is revised to read as follows:

§ 36.4342

Delegation of authority.

* * * * *

(e)(1) Authority is hereby delegated to the officers, designated in paragraph (e)(2) of this section, of the entity performing loan servicing functions under a contract with the Secretary to execute on behalf of the Secretary all documents necessary for the servicing and termination of a loan made or acquired by the Secretary pursuant to 38 U.S.C. chapter 37 (other than under subchapter vi of that chapter). Documents executed under this paragraph include but are not limited to: loan modification agreements, notices of default and other documents necessary for loan foreclosure or termination, notices of appointment or substitution of trustees under mortgages or deeds of trust, releases or satisfactions of mortgages or deeds of trust, acceptance of deeds-in-lieu of foreclosure, loan assumption agreements, loan assignments, deeds tendered upon satisfaction or conversion of an installment land sales contract, and documents related to filing, pursuing and settling claims with insurance companies relating to hazard coverage on properties securing loans being serviced.

(2) The designated officers are: Vice President, Assistant Vice President, and Assistant Secretary.

(3) The Director, Loan Guaranty Service, Washington, DC, shall maintain a log listing all persons authorized to execute documents pursuant to paragraph (e) of this section and the dates such persons held such authority, together with certified copies of resolutions of the board of directors of the entity authorizing such individuals to perform the functions specified in paragraph (e)(1) of this section. These records shall be available for public inspection and copying at the Office of the Director of VA Loan Guaranty Service, Washington, DC 20420.

(Authority: 38 U.S.C. 501, 3720(a)(5))