Inquiry Routing & Information System (IRIS)
Notifying VA of returned short payoff as a partial payment
I received payoff funds that are not sufficient to payoff the loan and returned the funds to the borrower. Am I responsible for notifying the VA that I returned that short payoff as a partial payment?
Servicers are required to submit the Partial Payment Returned event when they return a partial payment to the borrower. A partial payment is a remittance by or on behalf of the borrower on a loan in default of any amount less than the full amount due under the terms of the loan and security instruments at the time the remittance is tendered. Funds submitted for paying off the loan are not considered a partial payment as they were not remitted for the purpose of bringing the loan current; therefore, the servicer would not be required to submit the Partial Payment Returned event.