January 30, 1974 M29-1, Part II\
Change 11

CONTENTS\
CHAPTER 34. VETERANS MORTGAGE LIFE INSURANCE\
PARAGRAPH PAGE\
34.01 General 34-1\
34.02 Initial Notification to Eligible Veterans 34-2\
34.03 Second and Followup Notifications 34-2\
34.04 Processing Replies 34-2\
34.05 Initial Project-Processing No-Match Cases 34.3\
34.06 Initial Project-Processing Input to Establish Deductions 34.3\
34.07 Initial Project-Final Action in VA Center, St. Paul 34-4\
34.08 Recording Action Taken 34-4\
34.09 Notification of Veteran 34-4\
34.10 Processing VA Form 29-8636 34.5\
34.11 Processing No-Match Cases (Other Than Death) 34-5\
34.12 Processing Input to Establish Deductions 34-5\
34.13 Final Action in VA Center, St. Paul 34-5\
34.14 Certificates 34-5\
34.15 Increase in Amount of Grant 34-6\
34.16 Change of Address 34-6\
34.17 Adjustment of Premiums 34-7\
34.18 Adjustment of Amount of Insurance 34-8\
34.19 Adjudication of Death Claims 34-8\
34.20 Recovery of Earned and Unearned Premiums 34-9\
FIGURE\
34.01 Basic Requirements for VMLI and Insurance Effective Date 34-10\
34.02 Veterans Mortgage Life Insurance Premium Refunds 34-11

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May 12, 1980 M29-1, Part II

Change 16

34.01 GENERAL CHAPTER 34. VETERANS\' MORTGAGE LIFE INSURANCE

a\. Public Law 92-95, approved and effective August 11, 1971, authorized
the Administrator of Veterans Affairs to purchase from one or more life
insurance companies a policy or policies of mortgage protection life
insurance on a group basis. These policies automatically insure any
eligible veteran who is or has been granted assistance in securing a
suitable housing unit under 38 U.S.C. ch. 21 against the death of the
veteran, unless the veteran elects in writing not to be insured under
this group policy or fails to timely respond to a request from the VA
for information on which his \[or he?\] premium can be based.

b\. The Bankers Life Insurance Company of Nebraska, Lincoln, Nebraska
was selected to be the insurer for the VMLI (Veterans Mortgage Life
Insurance). Group Policy Number GL-1604 was issued for this purpose.

c\. To facilitate the handling of administrative decisions and to
maintain liaison with the VA, the insurer established the OVMLI (Office
of Veterans Mortgage Life Insurance) with the following address:

Office of Veterans Mortgage Life insurance PO. Box 81497

Lincoln, Nebraska 68501

d\. The insurance program is under the supervision of the VA. The VA
Center, St. Paul, Minnesota, was designated the responsibility of
notifying veterans concerning their eligibility for VMLI. This relates
to veterans with a permanent and total service connected disability who
have received a grant in securing a specially adapted housing unit.

e\. Additional responsibilities of the VA center include maintaining
records of all activities incident to the release of the notifications
and the necessary followup requirements; the control and processing of
replies; liaison with the St. Paul and Hines data processing centers for
the establishment and control of deductions from benefits for the
payment of monthly premiums; and the accumulation and control of all
material for acceptance cases which will be forwarded to the insurer.

f\. Premiums are payable monthly and are due on the 11th day of each
month. They are based on the mortality costs of insuring standard lives,
and are, therefore, lower than any commercial premiums for similar
coverage. The Government bears the administrative cost of the insurance
and all costs for claims in excess of the premiums paid by the veterans.

g\. The law authorized and directed the VA to deduct the premiums
charged veterans for the life insurance under this program from any
compensation payable to them by the VA, and to pay such monthly premiums
to the insurer. An insured veteran, not drawing compensation from the
VA, must pay his \[or her\] premiums directly to the insurer. It is not
the responsibility of the VA to see that these direct premiums are paid
monthly.

h\. Premiums are determined by the insurance age of the veteran, the
outstanding balance of the mortgage at the time of application, and the
remaining length of time the mortgage has to run.

i\. When the insurance is approved on a day other than the 11th, a full
monthly premium will be collected for any portion of a month.

j\. As the premiums collected from insureds\' benefits do not cover the
cost of this program, additional funds will be transferred periodically
to the Bankers Life Insurance Company of Nebraska from the compensation
and pension appropriation 36X0l02. \[These funds are deposited into a
Contingency Reserve Fund which is regulated by OVMLI. Consistent with an
agreement between the VA and OVMLI, the fund is to remain at a level no
lower than \$200.000 and not in excess of \$400.000. To accomplish this,
the manager of OVMLI telephones the Insurance Program Management
Division

(290), VA center, Philadelphia, each time the fund falls to the lower
level and requests a contribution to the fund. (The call is \~ followed
by a formal written request.) As a result of the telephone contact, a
teletype is sent to the Hines DPC (data \~ processing center) advising
them to disburse the required funds to OVMLI. In addition, the Director,
Budget Staff (201E) and

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M29-1, Part II May 12, 1980

Change 16

the Chief Benefit Payment and Accounting Policy Division (047C2), VA
Central Office, are advised that the disbursement has?- been
authorized.\]

k\. Figure 34.01 provides the basic requirements for VMLI and, assuming
the requirements are met, the effective date of the insurance under
various conditions.

34.02 INITIAL NONFICATION TO ELIGIBLE VETERANS

a\. All living veterans who had received a housing grant as of August
II, 1971, had to be contacted and offered an opportunity to apply for
the insurance.

b\. When a veteran \[was\] granted assistance in securing a suitable
housing unit, he \[/she was\] assigned a PHGRC number \[(currently known
as a PH number)\]. Using the file of PHGRC numbers maintained in the
\[Washington regional office (file is now maintained in Central
Office)\], photocopies of the PHGRC\'s \[(formerly VA Form 4-1836 and VA
Form 26-1836(372), Paraplegic Housing Grant Record Card; currently VA
Form 26-1836, Specially Adapted Housing Grant Record Card)\] were
obtained for \[those\] veterans eligible for the insurance on August 11,
1971. A VMLI folder was established for each PHGRC. The Hines DPC
furnished three sets of address labels for each eligible veteran based
on information in the compensation and pension master records. A package
for mailing was assembled for each address label. The package contained:

\(l\) FL 29-710(NR) \[(discontinued)\] which briefly explained the new
legislation, showed the date of the mailing and the veteran\'s PHGRC
number.

\(2\) VA Form 29-8636, \[Veterans\' Mortgage Life Insurance\] Statement.

\(3\) Return envelope, addressed and postage free.

\(4\) An FL 29-71 l(NR) ((discontinued)\], which requested the package
be mailed to the veteran, when the label indicated the veteran\'s
address was in care of a bank or other financial institution. This
letter also showed the veteran\'s PHGRC number. The FL 29-71 1(NR)
\[(discontinued)\] was not released when the institution appeared to be
a court-appointed fiduciary (incompetency case).

c\. The VMLI folder was noted to show the release of the package.

\[d. See paragraph 34.09 for current processing procedures.\]

34.03 SECOND AND FOLLOWUP NOTIFICATIONS

a\. After 25 days, a second package was assembled and mailed to all
veterans who had not responded to the first mailing.

VA Form 29-621(335), Important Notice, was also enclosed in the second
mailing. It solicited the cooperation of the veteran. The FL
29-710(NR)\[(discontinued)\] carried the new mailing date. The VMLI
folder was noted to show the followup date.

b\. For those veterans who failed to respond within 25 days of the
second mailing, a letter was sent to the Director of the regional office
having jurisdiction over the area in which the veteran resided. VA Form
29-8636 \[ \], and a return envelope were enclosed with the letter. The
letter requested the regional office, through a responsible official, to
endeavor to personally contact the veteran (or guardian for incompetency
cases). The veteran (or guardian) was asked to complete the VA Form
29-8636 (part A to apply for the insurance or part B if it is being
declined). When the veteran (or guardian) refused to cooperate, a VA
Form 119, Report of Contact, was requested. The VA Form 119 was also
requested if the veteran (or guardian) could not be located. When there
were any indications that the veteran no longer owned the property
involving a \[specially adapted\] housing grant, the information was to
have been included in the report. Completed VA Forms 29-8636 and/or 119
were returned to the VA Center, St. Paul, Minnesota. The VA Forms 119
that indicated a failure to cooperate or the inability to locate the
veteran (or guardian), were considered as declinations.

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May 12, 1980 M29-1, Part II

Change 16

34.04 PROCESSING REPLIES

a\. All replies involving an acceptance of VMLI were acknowledged \[ \]
by the VA center, St. Paul.

b\. When the reply involved a declination of the insurance without a
reason (blocks 1 and 3 of item 3, part B, VA Form 29-8636), the veteran
was asked for an explanation of the decision to refuse the insurance
protection.

c\. When discrepancies existed or information was incomplete in an
acceptance of the insurance (part A, VA Form 29-8636), the VA center,
St. Paul, corresponded directly with the veteran (or guardian). The
missing information or clarification was requested by letter and, if
necessary, another VA Form 29-8636 was released. When the VA Form
29-8636 contained complete information in items 2 through 8 and a
signature in item 14, the veteran (or guardian) was not contacted. If
the date was missing in item 15, the postmark date was entered. Missing
mortgage information (items 9 through 13) was obtained from the mortgage
company shown in item 8 (see subpar. d below). (Item numbers are
different on later editions of this form.\]

d\. An FL 29-71 2(NR) \[(now FL 29-712)\] (currently dated) and a return
envelope were released to the mortgage company for all cases involving
an acceptance of VMLI by a veteran or his (or her\] guardian. Whenever a
mortgage company failed to respond to an FL 29-712(NR) within 25 days,
another FL 29-712(NR), prominently noted in red SECOND REQUEST was
released. If there was no response within 25 days of the second request,
the mortgage company was contacted by telephone. If the information
received from the company conflicted with that received from the
veteran, or needed any clarification, the mortgage company was contacted
again.

e\. When a statement was returned unclaimed as a result of the first or
second mailing to the veteran, the appropriate regional office was
contacted for a better address. When mail was returned unclaimed as a
result of a mailing to a mortgage company, the veteran was requested to
verify the address. When a statement was returned unclaimed \[because of
the death of the veteran,\] determination as to insurability was made in
accordance with the instructions provided in paragraph 34.19.

34.05 INITIAL PROJECT-PROCESSING NO-MATCH CASES

If no address label was received from Hines DPC, the PHGRC was reviewed
to determine if there was a record of a grant having been vouchered. For
those cases indicating a grant was vouchered, the PHGRC\'s were
forwarded to Central Office Index Division. Upon return of the indexed
PHGRC\'s they were separated into death cases (see par. 34.19 below);
those with \[claim\] number corrections and all others. When \[claim\]
number corrections were involved, the appropriate regional office and
the Hines DPC were contacted to attempt to resolve the discrepancy. If
eligibility was established, a mailing package was assembled, dated and
released to the veteran. This delayed mailing also applied to all other
cases that were omitted during the first mailing. When a suitable
address was not apparent on the PHGRC, the appropriate regional office
was contacted.

NOTE: Under no circumstances was a veteran billed for premiums for the
period between August 11, 1971, and the date a declination was received
as long as the declination was a response to one of the original
mailings or personal contacts by a VA employee.

34.06 INITIAL PROJECT-PROCESSING INPUT TO ESTABLISH DEDUCTIONS

a\. Concurrent with the receipt of the address labels, the VA center,
St. Paul, also received a VA Form 29-5926, Request for DFB Action, for
each set of address labels. This form was used as a turnabout card for
input to the system for the purpose of calculating the amount of premium
to be withheld from the veteran\'s compensation.

b\. Upon receipt of the information from the mortgage company (on FL
29-7I2(NR)) \[(currently FL 29-712)\], the turnabout card was clerically
completed to show the

\(l\) Effective date of original mortgage.

\(2\) Duration of original mortgage in years.

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M29-1, Part II May 12, 1980

Change 16

\(3\) Date of birth.

\(4\) Effective date of insurance.

\(5\) Amount of deduction (premium).

\(6\) Mortgage balance.

c\. If a mortgage loan balance exceeded \$30,000, or there was evidence
of irregular payments (intermittent or ballooned payments during some
part of the year or at the end of the mortgage period), a letter
accompanied by the entire file of material was directed to the Office of
the Chief Actuary (299), Central Office, for the computation of the
correct premium. Also, if the veteran was responsible for a construction
loan prior to taking possession of the house and amortization of the
mortgage was delayed, the case was sent to the Office of the Chief
Actuary for computation of the premium. The turnabout cards for this
group were withheld from the workflow until a reply was received from
the Chief Actuary.

d\. The completed turnabout cards were sent to the St. Paul DPC to be
keypunched, processed card-to-tape and transmitted to the Hines DPC. \[
\]

e\. The processed turnabout cards, including the rejects, were returend
to the VA center, St. Paul, to be retained indefinitely. Additionally,
the servicing DPC supplied a tabulated reject listing that was
identified as MPLI EDIT REJECT LISTING. It identified each reject and
the reason for rejection. If in order, the required corrections were
made and a second turnabout card or suitable replacement submitted.

34.07 INITIAL PROJECT-FINAL ACTION IN VA CENTER, ST. PAUL

a\. Upon receipt of feedback information from the Hines DPC (VA Form
20-8270, C&P Master Record-Audit Writeout), the VA Forms 29-8636 were
completed (items 16-20) and combined in the VMLI folder with all other
related material. Information about the amount of the monthly premium
(the amount appeared on the VA Form 20-8270) was released to each
insured with a local form letter.

NOTE: Item numbers on VA Form 29-8636 differ with later editions.\]

b\. Declinations \[were\] maintained in the VMLI folders with related
material in the VA center, St. Paul indefinitely. Material for other
veterans (those without grants, death before the date of the law,
ineligible because of age, no mortgage, etc.) are also retained at the
VA center.

34.08 RECORDING ACTION TAKEN

All actions taken such as first mailing, second mailing, letter to VA
regional office, FL 29-712(NR) \[(currently FL 29-712)\] to mortgage
company, VA Form 29-5926 completed, etc., were recorded on the VMLI
folder to reflect the date and type of action taken.

34.09 NOTIFICATION OF VETERAN

a\. For a veteran becoming eligible to apply for the insurance after
August 11, 1971, a copy of his\[/her VA Form 26-1836, Specially Adapted
Housing Grant Record Card\], is mailed to VA center, St. Paul (292M),
from the office of the Assistant Director for Construction and Valuation
(262A), Central Office.\] The St. Paul VA center will index the \[PH
number\] through BIRLS (Beneficiary Identification and Records Locator
Subsystem) before taking any other action.

b\. The veteran will be sent a \[letter which briefly explains the
insurance, a VA Form 29-8636 and VA Pamphlet 29-79-2, Information and
Premium Rates for Veterans Mortgage Life Insurance. The letter also
requests a reply within 31 days from the date of the letter. If a
response is not received within 45 days, a letter will be sent by
certified mail with a return receipt requested. It will inform the
veteran that failure to furnish the necessary information will terminate
any coverage he/she may have had 60 days from the date of the letter. A
60-day diary will be established upon release of the letter\].

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May 12, 1980 M29-1, Part II\
Change 16

c\. \[If, during the diary period, a change of address is received from
the Hines DPC and the return receipt card has not yet been returned, a
second letter will be released to the veteran at the new address. At
this time, a new 60-day diary will be established beginning the date the
second letter is released. However, if the return receipt card has been
returned, a second letter will not be released and the original diary
will remain unchanged.

d\. In all cases, by the 50th day of the diary, the veteran will be
contacted by telephone or in person regarding the required information.
At this time it will be ascertained if the veteran still desires the
coverage. If the veteran does desire the insurance, it will be made
clear to him or her what information is needed in order to comply.

e\. A VA Form 119 will be prepared showing how the veteran was contacted
and the result of the contact, or showing the veteran was not contacted
and the reason why. The VA Form 119 will be filed in the veteran\'s
claims folder.

f\. At the conclusion of the 60-day diary period, if the veteran has
failed to comply, a letter will be sent by certified mail with a return
receipt requested, informing the veteran that the coverage has ceased as
of a specified date.\]

34.10 PROCESSING VA FORM 29-8636

\[a.\] Upon receipt of a VA Form 29-8636 from a veteran becoming
eligible for the insurance after August 11, 1971, the VA center, St.
Paul, will take appropriate action as provided in paragraph 34.04.

\[b. Upon receipt of a VA Form 29-8636 from a veteran who has been
eligible for the insurance but did not contract for the coverage because
he or she was not obligated under a mortgage loan on the date of
eligibility; or elected in writing not to be insured; or failed to
timely respond to a request for information on which premiums could be
based; or refinanced an existing mortgate; or obtained a new mortgage on
a new housing unit after selling a housing unit which was already
insured, the following procedure will be followed:

\(1\) The applicant will be informed in writing of the date he or she
was eligible for the coverage or the date the previous coverage
terminated, whichever is appropriate.

\(2\) The applicant will then be requested to answer the following two
questions:

\(a\) Has your health changed in any way since the date shown above?

\(b\) Have you acquired any new disabilities since the date shown above?

\(3\) If the answer to either of the two questions (see subpar. (2) (a)
and (b) above) is in the affirmative, the applicant would be requested
to furnish specific information concerning the dates of treatment, and
the names and addresses of any doctors or hospitals that provided
treatment.

\(4\) Upon receipt of the above information, the case should be referred
to the Insurance Program Management Division (290A), Philadelphia VA
center, for review and a final decision.

\(5\) The Insurance Program Management Division will review the
application for insurance and return a written notification of their
decision. Upon receipt of the notification, appropriate action will be
taken to grant or deny coverage to the veteran.

\(6\) In any case when the veteran does not indicate that there has been
any change in his or her health status, appropriate action to grant the
coverage will be initiated immediately upon receipt of his or her
negative response to the health questions.\]

34.11 PROCESSING NO-MATCH CASES (OTHER THAN DEATH)

a\. Upon receipt of a VA Form 29-8636 with part A completed and ther is
no record of a \[VA Form 26- 1836\] being received, it will be necessary
to contact the \[Specially Adapted Housing Unit in Central Office to\]
request status of the veteran.

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M29-1, Part II May 12, 1980

Change 16

b\. If the \[VA Form 26-1836\] has been received but the information on
the VA Form 29-8636 does not agree with the information on the card,
action will be taken to resolve the discrepancy. If the file number does
not agree, the veteran will be indexed through BIRLS and the appropriate
regional office and Hines DPC contacted to determine the correct file
number.

34.12 PROCESSING INPUT TO ESTABLISH DEDUCTIONS

a\. After the appropriate information is received from the veteran and
the mortgage company, a VA Form 28-8645, Deduction From Benefit Code
Sheet for VMLI, will be prepared. The insurance premium block will be
blank except as provided in subparagraph b below. Up to nine cases may
be entered on each form. (See par. 34.17 for completing VA Form 298645.)

b\. If the mortgage loan exceeds \$40 ,000, or payments are to be made
on an irregular basis, or ballooned payments are to be made, \[an
overprinted VA Form 3230, Reference Slip, and\] the entire \[VMLI\] file
will be sent to the Actuarial Staff (299), VA center Philadelphia, for
computation of the premium. Also, if the veteran is responsible for a
construction loan prior to taking possession of the house and
amortization of the mortgage is to be delayed, the case will be sent to
the Actuarial Staff (299) for computation of the premium. These cases
will not be entered on the VA Form 29-8645 until a reply is received
from the Actuarial Staff (299) at which time the case will be entered on
the form, including the amount of premium in the Insurance Premium block
(47-51).

\[(1) Prior to sending a case to the Actuarial Staff (299) for a premium
calculation, the VMLI specialist will determine and assign an effective
date to the contract. In order to assign the correct effective date, use
the instructions outlined in subparagraphs (a) i and 2 below.

\(a\) In Cases Involving an Additional Grant

[l]{.underline}. If flu original insurance was effective before October
l, 1978, the reduced coverage was effective October l, 1978; the

Actuarial Staff (299) will calculate the reserve credit to October
1,1978. Any difference in premiums will be refunded from V October l,
1978, to the current date.

[2]{.underline}. If the original insurance was effective on or after
October 1, 1978, the reduced coverage will have the same effective date
as the original insurance. Do not send these cases to the Actuarial
Staff (299). Premiums will be refunded from the effective date to the
current date.

\(b\) In Cases Not Involving an Additional Grant

[l]{.underline} - If it is a case that involves previous VMLI coverage,
it will be sent to the Actuarial Staff (299) for calculation of the
reserve credit.

[2]{.underline}. If it is an original case with a construction loan, and
the amount of the mortgage is less than or equal to the maximum amount
of insurance (\$40.000), it need not be sent to the Actuarial Staff
(299) for calculation. To calculate the premium on any such case, add l
year to the term of the mortgage and use the published premium tables.

\(c\) In no case will the increase in the specially adapted housing
grant result in a reduction of the veteran\'s eligibility for the
\$40,000 maximum insurance coverage.\]

c\. The completed VA Forms 29-8645 will be sent to the St. Paul DPC to
be keypunched, processed card-to-tape, and transmitted to the Hines DPC.
\[ \]

d\. The processed VA Forms 29-8645, including rejects, will be returned
to the VA center, St. Paul, to be retained indefinitely. In addition,
the servicing DPC will supply a tabulated reject listing identified as
MPLI EDIT REJECT LISTING. It will identify each reject and the reason
for rejection. If in order, the required corrections will be made and
the case entered on a new VA Form 29-8645.

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May 12, 1980 M29-1, Part II\
Change 16

34.14 CERTIFICATES

Each insured veteran will receive a certificate from the VA setting
forth the benefits to which he or she is entitled under

the insurance, and the essential features of it, including any
provisions limiting the coverage, or reducing the benefits, to whom
benefits are payable, and to whom proof of claim should be submitted.
\[The amount of insurance coverage is shown on the address label\].

34.15 INCREASE IN AMOUNT OF GRANT

a\. Eligible veterans \[received\] a \$12,500 housing grant prior to and
after the VMLI program became effective on August 11, 1971. On July i0,
1972 the amount of grant was increased to \$ 17,500. \[On December 31,
1974, the grant was increased to \$25,000. Further, on October 18, 1978,
the grant was increased to \$30,000. This latter increase was made
effective as of

October 1, 1978, and is available not only to veterans submitting a
grant application on or after October 1, 1978, but is also available to
those veterans who received a grant prior to October l, 1978\] and who,
on that date, had undisbursed \[grant\] funds in an escrow account \[
\].

b\. \[When supplemental grant funds are approved, Central Office
furnishes the VA center in St. Paul with a supplemental

VA Form 26-1836\].

c\. If action was not initiated when the first \[VA Form 26-1863\] was
received, the supplemental \[form\] should be

processed as an original card. If a premium has already been established
as a result of the original card, the veteran should be

contacted to determine what disposition was made of the supplemental
grant. If the original mortgage principal or mortgage period has been
reduced, this information should be verified through the mortgage
company. If the information is confirmed, action should be taken to
adjust the VMLI premium and the insurer advised to effect any refund
that is due the insured.

34.16 CHANGE OF ADDRESS

a\. Whenever a veteran who has received a housing grant, submits a
change of address to the Hines DPC, they will notify VA center, St.
Paul, and provide the current address.

b\. If the address change involves a veteran with VMLI in force, the
insured will be immediately requested to inform the VA if the change of
address indicates termination of ownership of the housing unit on which
the mortgage insurance was obtained. He or she will also be advised that
the unused portion of eligibility for mortgage insurance may be obtained
on a new home only in those instances when he or she has divested
himself or herself of ownership of the prior home. Continued residence
in the home on which the insured mortgage exists is not a requirement in
order to keep the insurance in force.

c\. If the address change involves a veteran without VMLI in force, the
related records will be examined to determine the status of the case. If
the insurance was previously declined, or was terminated as no longer
desired, or because of age, the change of address notice may be filed
without further action. If the insurance was previously declined or
terminated because the housing unit was sold, or no mortgage existed, or
because the mortgage was paid off, the veteran should be contacted to
determine if he or she is eligible to apply for the insurance. If the
reply indicates eligibility to apply, a VA Form 29-8636 will be released
together with a dictated letter. The letter will inform the veteran that
he or she may be eligible for the mortgage insurance and the enclosed
form should be completed: Part A if he or she wants to apply for the
insurance, or part B if he or she does not wish to apply. If the letter
is returned unclaimed and it is correctly addressed, or if a reply is
received indicating no interest in the insurance, no additional action
will be taken and no diary will be established nor a followup made when
a veteran fails to respond to an inquiry involving a change of address.

d\. If the veteran applies for the insurance, the usual development and
processing as provided previously will be completed. The effective date
of the new insurance coverage will begin as of the 11th day of the
premium month in which the acceptance was signed. Under no circumstances
will the insurance coverage be automatic when resumption of eligibility
is involved. Resumption of eligibility is defined as a mortgage loan on
a second or subsequent home acquired after August 11, 1971, the
effective date of the law which provides for this insurance program.

e\. A change of address in care of a banking institution or a guardian
(incompetent case) will be disregarded and filed without further action.

34-a

January 30, 1974 M29-I, Part II\
Change 11\
34.17 ADJUSTMENT OF PREMIUMS\
The following rules apply when adjusting VML1 premiums:

a\. A recalculation of the premium is required whenever the
prepayment(s) on the mortgage under which the amount of insurance is
determined amounts to \$600 or more from the original date of the
insurance or from the date the premium was last adjusted. Ml
discrepancies will be resolved by contacting the company holding the
mortgage.

b\. When the adjustment is made retroactively because of an error, the
premium must be computed at the original age.

c\. When an adjustment is made currently because of a current
prepayment, the premium must be computed at the current age.

d\. If the prepayment is made after the effective date of the mortgage
insurance, the adjustment will be made as of the next monthly due date
following the reduction.

e\. Whenever the input information will cause the system to calculate
the premium incorrectly, it should be manually calculated and entered on
VA Form 29-8645.

\(I\) **A** discontinuance entry (action type 3) and an establishment
entry (action type 5) is needed to change a name or file number. A
single entry (action type 5) will accomplish the necessary action on
premium adjustments.

BLOCKS TITLE ENTRY

l Blank Leave blank.\
2-10 File No. or File or Social Security No.\
Social Security No. If file number, leave block 2\
blank.\
11-13 Name Code First three letters of insured\'s\
last name.

14 No Title Leave blank.\
IS Action Type 5-If establishment.\
3-If discontinuance.\
16 No Title Leave blank.\
17-22 Effective Date of If establishment, actual effective\
Original Loan date of loan.\
(Month, day, year) If discontinuance, leave blank.\
23-26 Duration of Orig. If establishment, two-digit year in\
Mtge. (Yrs.) blocks 23-24, and two-digit month\
in blocks 25-26 to show duration\
of original mortgage. If disc on\
tinuance, leave blank.\
27-32 Date of Birth If establishment, show insured\'s\
(Month, day, year) date of birth.\
33 No Title Leave blank.\
34-39 Effective Date of If establishment, show actual\
Insurance effective date of insurance.\
(Month, day, year) If a correction, use **a** date that\
will prevent duplicate deductions.\
If discontinuance, leave blank.

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M29-1, Part II January 30, 1974

Change 11

BLOCKS TITLE ENTRY

40 No Title Leave blank. b\
41-45 Current Mortgage If establishment, show balance as\
Balance of the original effective date of\
insurance.\
If discontinuance, leave blank.\
46 No Title Leave blank.\
47-5 l Insurance Premium Insurance premiums for all cases\
where premium was supplied by the\
Chief, Actuarial Staff, and on all\
corrective cases. Otherwise, leave\
blank.\
52 No Title Leave blank.\
53-58 No Title Leave blank.

\(2\) New cases may be entered on the same code sheets that are used for
correction purposes.

\(3\) Corrections should be made on a current basis to insure that
retroactive deductions of premiums already withheld are not made. For
example, if a correction is to be made in the January cycle, and the
premium for December has already been deducted, the effective date of
insurance field should show a January date not earlier than the 11th of
the month.

\(4\) Refunds of overdeductions will be made by the St. Paul VA center,
who will request the OVMLI to return the necessary funds. The money will
be deposited and subsequently disbursed from 36X6875, Suspense.
Similarly, the St. Paul VA center will collect underdeductions from the
insured and transfer them to the OVMLI. Figure 34.02 provides the
effective date of premium refunds under different situations.

\(a\) In the case of small amounts of underdeductions, the insured will
be advised of the amount and that the payment should be made to the
Office of Veterans Mortgage Life Insurance, Lincoln, Nebraska. A copy of
the letter will be sent to that office advising them of the amount in
question.

\(b\) If the veteran owes an amount, the repayment of which in one sum
may cause a hardship, the veteran will be advised and given the
opportunity to repay the amount in a lump sum or have it taken from
future compensation checks until the underpayment is paid.

34.18 ADJUSTMENT OF AMOUNT OF INSURANCE

a\. If title to an undivided interest is vested in a person other than
the spouse, the amount of the insurance should be computed to be such
part of the total of the unpaid principal of the loan outstanding as is
proportionate to the undivided interest of the veteran in the entire
property.

b\. If the insured has deeded an interest in his/her home to her than
the is VMLI coverage must be reduced proportionately fly. For instance,
en 50 percent of 4interest is deeded the insurance will be reduced by 50
percent a is premium adjusted accordingly. The veteran will be advised
by letter of the action taken. The company ho mortgage will be notified
about the reduction in the amount of insurance coverage.

34.19 ADJUDICATION OF DEATH CLAIMS

a\. When a notice of death is received and it is determined there is no
VMLI in force, the following determinations will be made:

\(1\) **A** grant was approved and vouchered.

3\~S

May 12, 1980 M29-1, Part II\
Change 16

\(2\) Date of death was on or after August 11, 1971.

\(3\) Veteran was under age 70 on the date of death.

\(4\) A mortgage existed on the house on the date of death.

\(5\) There is no record of the veteran declining the insurance.

b\. If the deceased veteran meets the foregoing requirements, the
complete mortgage information will be forwarded to the insurer.

c\. Upon receipt of proof of death of an insured, the St. Paul VA center
will take the following action:

\(1\) Photocopy all pertinent material in the \[SAHGRC\] folder
including the death certificate. The original of the death certificate
will be sent to the insurer with the photocopies of the other material.
The photocopy of the death certificate will be filed in the (SAHGRC\]
folder.

\(2\) If records indicate the present house is not the original,
evidence will be obtained that the prior house was sold. This
information must be obtained as it is the responsibility of the VA (VA
center, St. Paul) to determine if the veteran is insured.

\(3\) Review the tabulated listings from Hines DPC to determine premium
deductions. If any premiums are due on the date of death, the
information will be included in the letter to OVMLI.

(3.1) Contact person reporting the death of the veteran or next of kin
for an affidavit of ownership \[with a current certification\] advising
them that this information can be obtained from their local Registrar\'s
office.

\(4\) If there is any question about the veteran being insured and it
cannot be resolved at the VA center, St. Paul, the case file with a
statement of facts will be sent to the Chief, Insurance Program
Management Division ((290)\], VA center, Philadelphia, for a decision.

\(5\) After all the information and material as provided in this
subparagraph have been assembled, a final review will be made to assure
that all pertinent material is included and everything is in order.

\(6\) A letter will be prepared for the signature of the Insurance
Officer to send the information and material to OVMLI. A statement that
the claim is payable will be included in the letter.

\(7\) Upon receipt of the letter and the material from VA center, St.
Paul, the insurer will complete the appropriate portion of \[CL 73\],
Veterans Mortgage Life Insurance Death Claim Form, and send it to the
mortgage holder. Upon receipt of the form, the mortgage holder completes
the appropriate portion of GR 5733 and returns it to the insurer. The
insurer now pays

the claim and sends a copy of the (CL 73\] to the VA center, St. Paul,
for their records. The form shows the name of the insured, his (or her\]
date of birth, location and legal description of the property, original
effective date of the mortgage, amount of the mortgage, interest rate,
duration of the mortgage, status of payments, principal balance, accrued
interest and total amount that was due as of the date of death. The copy
of the form will be filed in the VMLI folder.

34.20 RECOVERY OF EARNED AND UNEARNED PREMIUMS

a\. When the VA center, St. Paul, receives a notification of a VA
compensation check having been canceled because of the veteran\'s death,
and earned or unearned premiums due have been deducted for a period when
the veteran was not entitled to compensation payments, it will be
necessary for the center to contact the OVMLI and request that the
premiums be returned to the VA center, St. Paul, for the attention of
the Chief, Insurance \[ \] Division.

b\. When the checks are received, they will be sent to the \[Agent\]
Cashier, Collections and Cashier Section, Finance and (Centralized
Accounts Receivable\] Division, for deposit to the credit of 36F3875,
Budget Clearing Account (Suspense) VA.

34-9

M29-I, Part II May 12, 1980

Change 16

SF 1081, Voucher and Schedule of Withdrawals and Credits, will be
prepared to transfer credits to Hines DPC. The appropriation to be
credited will be shown as 26X0102, Compensation and Pension, VA. The SF
1081 (or attached listing) will identify each veteran by name, file
number, \[entitlement code, regional office of jurisdiction,\] amount of
his(/her\] credit and the reason for return of the money.

34-10

May 12,1980 M29-1, Part II\
Change 16

CORRECTED COPY

BASIC REQUIREMENTS FOR VMLI

1 - Housing grant has been issued.

2\. Mortgage loan on house or commitment if house under construction.

3\. Resides or will reside in mortgaged house.

4\. Under age 70.

INSURANCE EFFECTIVE DATE

(assuming requirements are met)

CONDITIONS EFFECTIVE DATE

l\. Mortgage effective and grant issued prior 8-II-7I\
to 8-11-71.

2\. Grant issued prior to 8-11-71. Date of mortgage\
Mortgage effective after 8-1 1-71.

3\. Mortgage effective prior to 8-11-71. Date grant issued\
Grant issued after 8-1 1-71.

4\. Mortgage effective and Except mortgage on other Mortgage effective
date or\
grant issued after than original house prior grant issue date,
whichever\
811-71. to 1-11-72. Is later.

5\. Mortgage on other than original 1-11-72\
house effective prior to 1-11-72.\
Grant issued prior to 1-11-72.

6\. Previous declination indicated or Date agreed to by\
no mortgage. Application submitted VA and applicant.\
subsequent to declination.

7\. Previous VMLI coverage terminated. Date agreed to by\
Application for coverage on new home. VA and applicant.

8\. VMLI in force. Mortgage refinanced. Date agreed to by\
Application for revised mortgage VA and applicant.\
coverage. (If application disapproved,\
VMLI remains in force.)

Figure 34.01 Basic Requirements for VMLI and Insurance Effective Date

34-10a

609435

May 12,1980 M29-I, Part II

Change 16

Figure 34.01 Basic Requirements for VMLI and Insurance Effective Date

34-10a

January 30, 1974 M29-1, Part II

Change 11

REASON REFUND EFFECTIVE DATE

House Next monthly due date following the date of sale. No date of\
Sold sale, the next monthly due date following the postmark date\
of veteran\'s notice.

Mortgage Next monthly due date following the date mortgage paid. No\
Paid payment date, the next monthly due date following the post-\
Off mark date of veteran\'s notice.

Insured Next monthly due date following the postmark date of re\
Requests quest or as of the premium due date for the month requested\
Cancellation by the veteran, whichever is later.

Partial Next monthly due date following the date of reduction.

Prepayment

Unearned Premiums deducted after a veteran\'s death are refundable for\
Premiums credit to the veteran\'s account when requested by the regional

office involved.

Figure 34.02 Veterans Mortgage Life Insurance Premium Refunds

523914 34-11