In Reply Refer to:373/26
                						         	  LOCAL RELEASE 26-00-06


TO:	SERVICERS AND HOLDERS


SUBJ:	PROCEDURES FOR BIDDING INSTRUCTIONS







The primary purpose of this release is to insure a good working relationship between holders/servicers and our
office.  With increasing workloads, as well as the addition of new employees, some personnel may not be familiar
with all the requirements and documentation needed to complete bidding instructions.


We want to insure that holders/servicers are aware of the accepted procedures to follow to receive bidding
instructions in our region (CT, MA, ME, NH, NY, RI and VT).  Last minute requests for bidding instructions, and
requests for bids with missing documentation, are becoming increasingly difficult to meet.


The VA Servicing Guide covers the required legal documents and procedures needed to provide accurate
and timely bidding instructions to holders/servicers of VA guaranteed loans. Where applicable, the 
 VA Servicing Guide designates the part of the Code of Federal Regulations relevant to these proceedings.



Chapter 1, Paragraph 1.06, Extension and Reamortizations (38 CFR 36.4314), and Chapter 3, Paragraph 3.03, 
Modifications-Extensions and Reamortizations (38 CFR 36.4313), outline the procedures lenders should 
follow when approving any of these term adjustments.  Holders/servicers are reminded that these 
agreements must be in writing and signed by the holder/servicer and the borrower(s).  VA must be notified 
"...of the terms of the agreement (preferably a copy of the extension or reamortization agreement) 
after the agreement has been executed, along with a copy of the credit report.


Chapter 2, Paragraph 2.10, Bankruptcy and Other Legal Proceedings (38 CFR 36.4319), advises 
holders/servicers that "copies of all procedural papers must be provided to the VACO of jurisdiction".  
This same paragraph goes on to explain to holders/servicers why this documentation is important and how 
it is to holders/servicers benefit to forward this information.


Chapter 4, Paragraph 4.09, Other Notices to VA (38 CFR 36.4319), advises holders/servicers that 
"a copy of every procedural paper filed on behalf of the holder/servicer and of each pleading served on 
the holder/servicer must be sent to VA".


Paragraph 4.12, Notice of Sale (38 CFR 36.4319(b)), outlines the time frame for submitting the Notice 
of Sale, "...must be delivered to VA at least 30 days prior to the scheduled foreclosure sale or within 5 
days of the first publication date, whichever is later".  Holders/servicers are also reminded of the need 
for the Status of Loan Account, VA Form 26-567, and the requirement of ordering a
VA Liquidation Appraisal.


Paragraph 4.13, Bidding Instructions (38 CFR 36.4320), states "a foreclosure sale should not be held 
unless the holder has received instruction from VA.  Normally, a letter of instructions will be sent in 
time to be received by the holder/servicer at least two working days prior to the date of the scheduled 
foreclosure sale".

If you have any questions, please contact Bruce Keller, Chief, Loan Service and Claims at (603)666-7482.








A.A. Snyder
Loan Guaranty Officer






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