Court Opinion

ID: 8167453
Source: CourtListenerOpinion
Date Created: 2022-09-09 21:01:58.809931+00
Date Added: 2024-06-11T16:39:40.338092
License: Public Domain

HOLD AWAY, Judge,
concurring in part and dissenting in part:
I dissent from the majority’s holding that the Secretary’s decision not to approve the veteran’s proposed deed in lieu of foreclosure is a matter that can be reviewed by appellate authority. Review of the relevant statutes and regulations establish that the decision is committed to agency discretion.
The Secretary is authorized to provide home loan guarantees to eligible veterans. See 38 U.S.C. §§ 3702, 3703. In the event of a default on a VA guaranteed loan, the mortgagee is required to notify VA of the default. See 38 U.S.C. § 3732(a)(1); 38 C.F.R. § 36.4316(a) (1997). The mortgagee must also provide VA notice thirty days before initiating action to liquidate real property securing a VA guaranteed loan. See 38 U.S.C. § 3732(a)(2), (c)(3)(A); 38 C.F.R. § 36.4317 (1997). Within thirty days of the mortgagee’s notice of intent to liquidate the secured property, the Secretary may, at his option, require the mortgagee to assign the loan and security to the Secretary in exchange for payment of the unpaid balance of the loan, including accrued interest. 38 U.S.C. § 3732(a)(2); 38 C.F.R. § 36.4318(a) (1997).
There is no specific statutory provision that authorizes the Secretary to accept from the veteran a conveyance of the secured property through a deed in lieu of foreclosure. The statutory section quoted by the majority states that the Secretary must provide the veteran with “information and, to the extent feasible, counseling” about alternatives to foreclosure; “conveyance of the property to the Secretary by means of a deed in lieu of foreclosure” is listed as an example of “alternatives to foreclosure.” 38 U.S.C. § 3732(a)(4)(A). That provision does not provide authority or guidance with respect to the Secretary’s recourse after a veteran defaults. However, the Secretary is granted broad discretionary powers relating to home loan guarantees, including power to “pay, compromise, waive[,] or release any right, title, claim, lien or demand, however acquired, including any equity or any right of redemption.” 38 U.S.C. § 3720(a)(4). He is also empowered to “take title to[ ] property, real, personal];,] or mixed.” The Secretary has prescribed that when a veteran proposes to convey the secured property to the mortgagee to avoid foreclosure, the Secretary must consent, in advance, to the terms of the conveyance. See 38 C.F.R. § 36.4320(c) (1997). The mortgagee can elect to convey the property received from the veteran to the Secretary. See 38 C.F.R. § 36.4320(g), (h).
Before a liquidation sale, a VA official “may” approve a complete release of the Secretary’s right to collect a debt resulting from a home loan guarantee. See 38 C.F.R. § 36.4323(e)(1) (1997). The regulation requires that to approve a complete release, the VA official must first determine, inter alia, that “the obligor completes, or the Secretary is enabled to authorize, an action which [would] reduce[] the [g]overnment’s claim liability sufficiently to offset the amount of the anticipated indebtedness” that would likely be collected by VA after a liquidation sale. See id. at § 36.4323(e)(l)(v). The regulation states that one example of such an action would be “termination of the loan by means of a deed in lieu of foreclosure.” See id.
In this matter, the Secretary did not approve the veteran’s request to convey a deed in lieu of foreclosure to the holder of his mortgage. See 38 C.F.R. § 36.4320(c). There are no statutory or regulatory guidelines established for how or when the Secretary would be permitted to approve a conveyance of certain secured property to the holder of the mortgage from the veteran. While the VA loan guarantee program is established to assist veterans, the Secretary also has a fiduciary responsibility to mitigate losses to the public fisc. The decision to approve an agreement between a mortgagee and a veteran to ■ accept a deed in lieu of *494foreclosure is initially a business decision made in the best interest of the government.
The Court has held that a determination by the Secretary that was committed entirely to his discretion is not reviewable by the Board or this Court. See Malone v. Gober, 10 Vet.App. 539, 544 (1997) (holding that statutory language that the Secretary “may” provide nursing care, where the language did not establish “how or when to exercise [his] authority,” is a decision committed to the absolute discretion of the Secretary); Willis v. Brown, 6 Vet.App. 433, 435-36 (1994) (holding that the Secretary’s discretionary authority in selecting a fiduciary was not reviewable by the Board); Darrow v. Derwinski, 2 Vet.App. 303, 305-06 (1992) (holding that the Board did not have jurisdiction to review the Secretary’s equitable powers under 38 U.S.C. § 503(a)). The Supreme Court has explained when a decision is committed to agency discretion:
[E]ven where Congress has not affirmatively precluded review, review is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion. In such a case, the statute (“law”) can be taken to have “committed” the decision to the agency’s judgment absolutely.
Heckler v. Chaney, 470 U.S. 821, 830, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) (emphasis added). This Court has stated that “an all-purpose, general ‘abuse of discretion’ standard” does not exist because it is impossible to review an agency action for an abuse of discretion where there are no “ ‘judicially manageable standards.’ ” Malone, 10 Vet.App. at 544 (quoting Heckler, supra); Darrow, 2 Vet.App. at 306 (same).
Review of the statutory and regulatory language, in this matter, indicates that the Secretary’s decision to approve or reject a deed in lieu of foreclosure is committed to his discretion and not reviewable by the Board or this Court. See Webster v. Doe, 486 U.S. 592, 600, 108 S.Ct. 2047, 100 L.Ed.2d 632 (1988) (stating that whether a decision is committed to agency discretion “requires careful examination of the statute on which the claim of agency illegality is based”); Cf. First Family Mortg.Corp. of Florida v. Earnest, 851 F.2d 843 (6th Cir.1988) (holding that a determination by the Secretary, under 38 U.S.C. § 1816 (1988) (now § 3732(a)(1), (2)), to pay the holder of the mortgage and accept an assignment of a loan and security was not reviewable because the decision was committed to agency discretion). First, there is no law that mandates that the Secretary take any action at all, aside from providing information and counseling, to assist a veteran in avoiding foreclosure. The veteran is entirely responsible for the consequences of defaulting on his obligation. Second, there are absolutely no standards for reviewing the Secretary’s determination of whether a deed in lieu of foreclosure would be warranted in a particular situation. The majority admits that there are no guidelines. See Part II, B, 2, swpra, at 489 (“Neither the statute nor the implementing regulations ... appear to provide any criteria or guidance for evaluating a request for a [deed in lieu of foreclosure].”); Id. at 490 (stating that “the Court is not aware that VA has prescribed standards to guide the exercise of its discretion when determining whether to accept or deny a [deed in lieu of foreclosure]”). Because there is no law to apply in reviewing the Secretary’s rejection of a proposed conveyance of a deed in lieu of foreclosure, the decision is committed to the Secretary’s discretion, and the Board does not have authority to review it. See Heckler, Malone, Willis, and Darrow, all supra.