VA Pays Millions in Home Loan Refunds

VA Home loan form
Roughly 53,000 disabled veterans were mistakenly charged VA funding fees on their home loans.

Officials at the Department of Veterans Affairs said they reviewed 130,000 cases over the summer to look for errors. Many of these were simple clerical mistakes or disability ratings changes, after veterans settled on their loans.

The Military Times’ recent article entitled “VA refunds $400 million in mistaken home loan fees” explains that with the current regulations, veterans and service members must pay a VA funding fee when they apply for a VA home loan. This charge can be between 0.5 and 3.3% of the total loan. The money is supposed to pay some administration costs for the department. Disabled veterans are exempt from this fee.

However, an inspector general report released earlier in 2019 found that roughly 53,000 disabled veterans were charged these fees in recent years.

VA officials announced in May that they would review current and past loans, and contact veterans eligible for refunds.

In a statement, Veterans Affairs Secretary Robert Wilkie explained that the effort stretched back as far as 20 years. “Our administration prioritized fixing the problems and paid veterans what they were owed.”

The total amount of the payouts was significantly higher than the nearly $290 million total investigators estimated earlier this year.

The refunds ranged from a few thousand dollars to more than $20,000 for some vets.

Veterans Affairs officials also announced a new policy guidance for lenders to make certain that they’re asking veterans applying for the loans about their disability status. The VA also has created new internal processes for oversight over future loan applications which may be eligible for waived fees.

The Department of Veterans Affairs has also planned new outreach efforts to help get the word out to veterans about the waivers they’re eligible to receive.

VA officials said they believe that their review of the issue is now complete. However, any veterans who think they may be entitled to a refund for mistaken fees can contact the department’s regional loan center office at (877) 827-3702 or visit the VA’s website for more information.

Reference: Military Times (October 8, 2019) “VA refunds $400 million in mistaken home loan fees”

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