In most cases, these alternatives have significant advantages for the homeowner and for the Government. Following is a discussion of these alternatives. Under most circumstances, GI loan holders are required to accept payment of the full delinquency and reinstate the loan. The delinquency may include certain legal costs if a homeowner is in foreclosure.
Many holders require certified funds for reinstatement.
The most common way of resolving a loan default is to work out a plan which will let a homeowner repay part of the delinquency each month, along with the regular monthly installment. If a homeowner is temporarily unable to meet the monthly mortgage obligation, the holder may extend forbearance by agreeing to suspend payments or accept partial payments for a limited period of time until the homeowner will be able to begin a repayment schedule. VA cannot require the holder to extend forbearance or to agree to a specific repayment schedule. However, a holder will usually cooperate so long as the homeowner can show that he or she will be able to resume payments on a specific date in the near future. When a loan is re-amortized, the delinquency is added to the loan balance to bring the payments up to date.