The Department of Veterans Affairs said it refunded more than $400 million in loan fees that were incorrectly charged after a multi-year review of millions of mortgages issued over the last two decades.
Veterans who were eligible for a refund were contacted via letters sent in the U.S. mail, according to a statement Wednesday from the VA. Many of the errors were in loans to military veterans whose exemption status changed following the issuance of a disability rating after the closing of their mortgages, the VA said. Disabled veterans are exempt from the VA funding fee, which typically costs between 0.5 percent and 3.3 percent of the loan’s balance.
“VA staff worked diligently throughout the summer reviewing 130,000 cases, which is an average of 16,000 loans reviewed 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.”
An inspector general report released earlier this year found that at least 53,000 disabled veterans had been charged the funding fees in recent years. VA officials announced in May they would review current and past loans and contact veterans eligible for refunds.
The payout total was significantly above the nearly $290 million investigators estimated earlier this year, according to the Military Times. The refunds ranged from a few thousand dollars to more than $20,000 for some individuals, the story said.
VA officials also announced new guidance for lenders to make sure they ask VA loan applicants about their disability status. The VA also established new internal processes for oversight over future loan applications which may qualify for waived fees, the Military Times said.
Source: HousingWire Magazine