Citation Nr: 20044524 Decision Date: 07/02/20 Archive Date: 07/02/20 DOCKET NO. 19-05 195 DATE: July 2, 2020 REMANDED The claim of entitlement to restoration of full VA home loan guaranty benefits is remanded. REASONS FOR REMAND The Veteran had honorable active duty service with the United States Air Force from May 2000 to June 2005. The instant matter is on appeal from an August 2018 decision. 1. The claim of entitlement to restoration of previously used VA home loan guaranty benefits is remanded. The Veteran believes he is entitled to a restoration of full VA home loan guaranty benefits following previous use of a VA home loan that resulted in a loss to VA. VA guarantees loans made to eligible veterans by private lenders for the purchase of a dwelling to be owned and occupied by the veteran. 38 U.S.C. § 3710(a)(1). A veteran who previously obtained a VA loan can use any remaining entitlement for a second purchase. In addition, entitlement used for the previous purchase may be restored and reused if any of the following conditions are met: (1) (A) The property which secured the loan has been disposed of by the veteran or has been destroyed by fire or other natural hazard; and (B) the loan has been repaid in full, or the Secretary has been released from liability as to the loan, or if the Secretary has suffered a loss on such loan, the loss has been paid in full. (2) A veteran-transferee has agreed to assume the outstanding balance on the loan and consented to the use of the veteran-transferee’s entitlement, to the extent that the entitlement of the veteran-transferor had been used originally, in place of the veteran-transferor’s for the guaranteed, insured, or direct loan, and the veteran-transferee otherwise meets the requirements of this chapter. (3) (A) The loan has been repaid in full; and (B) the loan for which the veteran seeks to use entitlement under this chapter is secured by the same property which secured the loan referred to in subparagraph (A) of this paragraph. (4) In a case not covered by paragraph (1) or (2) – (A) the loan has been repaid in full and, if the Secretary has suffered a loss on the loan, the loss has been repaid in full; or (B) the Secretary has been released [**9] from liability as to the loan and, if the Secretary has suffered a loss on the loan, the loss has been paid in full. 38 U.S.C. § 3702(b). Further, in limited circumstances, the Secretary has the discretion to waive any of the foregoing provisions and to exclude from the computation of entitlement any amount of entitlement previously used by a veteran. In the present case, the Veteran utilized VA home loan benefits in 2003, and the property was subsequently sold in a short sale in 2013. The bank mortgage servicer purportedly incurred a loss of approximately $16,000, which was recouped from VA. The Veteran asserts that his mortgage servicer did not take a loss, and the loan was fully paid. A Settlement Statement (HUD-1) was provided, but the copy of the document was poorly scanned into the electronic file. Additionally, internal notes from VA reflect a sum for a gross claim following the short sale, as well as a total claim following the short sale. There is no documentation of the reported payment between VA and the mortgage servicer, which forms the crux of the present conflict regarding an outstanding loss to the Secretary. Thus, remand is necessary in order to obtain a clear accounting of the loss reportedly incurred by the Secretary at the time of the 2013 short sale, as well as documentation pertaining to the payment to the bank mortgage servicer and notification letters to the Veteran to inform him of this debt following finalization of the sale. The matters are REMANDED for the following action: 1. Obtain and associate any documentation pertaining to the previous use of VA home loan guaranty benefits, to include payment to the mortgage servicer, notification letters regarding any debt to the Veteran, and the total loss incurred by VA. 2. Generate a clear, concise accounting of the loss incurred by VA, including any supportive documents. Send a copy of this accounting to the Veteran and his representative, and afford an opportunity for him to respond. 3. Following completion of the foregoing, the AOJ should review the record and readjudicate the claim on appeal. If it remains denied, the AOJ should issue an appropriate supplemental SOC, afford the Veteran and his representative an opportunity to respond, and return the case to the Board. B. MULLINS Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board H. Fisher, Associate Counsel The Board’s decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.