VA Refunds More Than $400 Million in Wrongly Collected Home Loan Fees

VA Refunds More Than $400 Million in Wrongly Collected Home Loan Fees
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The VA has returned more than $400 million in wrongly collected home loan fees to borrowers after an internal review of millions of loans issued over the past two decades.

Officials flagged more than 130,000 loans “where a refund was potentially due,” according to a VA news release announcing the repayment effort. Most of loan fees were collected properly, the release states, but the disability status of some veterans changed after the loan was processed, resulting in payment of fees that were no longer owed. VA did not say how many of the 130,000 potential cases resulted in refund awards.

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The release also outlines changes to the loan process designed to improve the fee-collection system, including better communication to borrowers about how and when fees can be waived; guidance to lenders on how to pursue updated Certificates of Eligibility from borrowers; and other “system and procedural changes” that would lead to better, faster oversight.

A July VA Inspector General report found more than 53,000 veterans may have been owed $189 million in fee refunds. A VA spokeswoman told at the time that more than $100 million in refunds had been approved and due to reach borrowers by the end of September.

Letters went out to veterans who are eligible to receive refunds, per the release, but those who believe they are entitled to one can call their VA Regional Loan Center at (877) 827-3702. More information on funding fees, including a fee chart and exemption requirements, are available at the VA’s website.

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Kevin Lilley
Kevin Lilley

Lilley serves as MOAA's digital content manager. His duties include producing, editing, and managing content for a variety of platforms, with a concentration on The MOAA Newsletter and Follow him on X: @KRLilley