In Reply Refer to:373/26
                						         LOCAL RELEASE 26-01-03






TO:	LENDERS


SUBJ:	REPORTING OF LOANS PAID IN FULL




The purpose of this release is to remind lenders and servicers of the Department of Veterans 
Affairs' (VA) requirement that they must notify VA in writing when a VA guaranteed loan has
been paid in full.


What does the Lender need to send to VA when the loan is paid in full?


When the loan has been paid in full, VA Regulation 36.4333 requires that the lender return the
original Loan Guaranty Certificate (LGC), VA Form 26-1899, clearly marked "paid in full"
and signed by an authorized officer or designee.  Please note that recent editions of LGGs
contain a "paid-in-full" box that can be checked prior to returning the document to VA.


 What if the Loan Guaranty Certificate has been lost?


If the original Loan Guaranty Certificate has been lost, please send VA a written notice
containing:

A statement that the VA guaranteed loan has been paid in full and the original LCG has
been lost
The veteran's full name
Either the entire VA loan number or the veteran's social security number. A complete VA
loan number would contain 12 digits, i.e. 73-73-6-0123456.
The name and telephone number of a contact peson at your firm.



Are there any exceptions?


The only exception to reporting a loan paid in full is when the VA-backed loan is paid through
foreclosure, short sale, or other settlement where VA has paid a claim.  In these cases, the
lender must return the original LCG (or written notification as noted above if the original LGC
has been lost).  The LGC or statement must clearly be marked "claim paid" rather than "paid
in full".  The document must be signed by an officer or authorized designee of the lender.


What about VA Certificates of Commitments when the loan has been cancelled?


The Certificate of Commitment, VA Form 26-1866, should be returned to VA clearly 
indicating that the loan has been withdrawn, when applicable.


Who should you contact if you have any questions?


If there are any additional questions, please contact a Loan Processing Representative at
(800) 827-6311, option 7.


Thank you for your time and anticipated cooperation in this matter.






William P. Geagan
Acting Loan Guaranty Officer