OAR 274-020-0386: Temporary Reduction of Payments

(1) In the event a veteran is unable to make required loan payments due to loss of income because of illness, injury, death, involuntary job loss, or economic stress due to factors beyond the veteran’s control, the veteran may apply for a temporary reduction of payments, provided that: (a) The veteran is the original borrower or one who assumed the loan pursuant to ORS 407.305 (formerly 407.063); (b) The veteran is residing in the property used as security for the loan at the time he or she requests the payment reduction; (c) The veteran must request the loan reduction by writing to the Director of Veterans’ Affairs, c/o Collection Unit, 700 Summer Street, N.E., Salem, OR 97310. The written request must contain a statement describing the reason for the request, current income, source of income, and must be accompanied by a copy of the veteran’s previous two years’ federal income tax returns; (d) The veteran must furnish any other documentation requested by the director relating to the reason for request. (2) In determining the amount and term for reducing loan payments, the director shall consider the value of the security, the balance owing on the loan, the total assets of the borrower, past payment record of the borrower, and any other matters related to financial hardship to the borrower and the financial position of the loan program: (a) Monthly loan payments may not be reduced to an amount less than the monthly loan cancellation life insurance premiums; (b) The director may recapture the reduced portion of the monthly payment and any other accrued delinquency by whatever repayment methods are appropriate to individual circumstances; (c) The terms and conditions of the payment reduction and repayment must be agreed upon, in writing, and approved by both the veteran and the director; (d) The veteran may be required to submit information periodically regarding his income and financial affairs in order to reevaluate the necessity of continuing the reduction in payments. Following such reevaluation, the loan payment reduction may be modified by the director; (e) The veteran must continue to reside in the loan security. (3) A veteran whose loan is in foreclosure is not eligible under this program. (4) Temporary reduction of loan payments is a benefit to be extended only in an extreme emergency and is not to be abused. (5) Because of the effect of these reductions on the solvency of the loan program as a whole, on the probable financial position of the program in the future, on the condition of the tax-exempt bond market, and on other borrowers in the program, the director has determined that the maximum number of borrowers that can be accommodated under this program is approximately one percent of the total outstanding borrowers. Therefore, at any time, the director will enter into agreements as provided in subsection (2)(c) of this rule with no more than one percent of the total loan portfolio, the number to be specified by the director.