VA Failed to Pay Millions of Dollars in Refunds to Veterans, Says Watchdog Report

Law Firm Newswire



Tampa, FL (Law Firm Newswire) July 23, 2019 – The Department of Veterans Affairs (VA) owes refunds to thousands of disabled veterans who were erroneously charged fees when they applied for home loans. A watchdog investigation found that veterans who bought homes under the VA’s Home Loan Guaranty Program could be owed up to $190 million.

The VA Inspector General estimated that the agency charged over $280 million in incorrect fees out of around $10 billion collected from veterans from 2012 to 2017. The VA only refunded about $100 million, leaving 53,200 veterans still awaiting payments. The overpaid fees averaged $4,000 and the highest owed amount was for close to $20,000.

“Veterans should not have to shoulder the burden of filing a claim for a refund, especially for a mistake that occurred due to no fault of their own,” commented Florida veterans lawyer David W. Magann. “It is important for the VA to have a proper system in place to process the owed fees in a timely manner so that they do not remain pending for years. After all, we are not talking about a small amount of money here.”

The VA is responsible for certifying veterans’ exemption from the fees when they take out a home loan. According to the report, the agency’s exemption certificates were “outdated, incorrect or missing exemption status.”

The watchdog investigation revealed that senior VA officials were aware of the problem since 2014. However, they did not take corrective action to ensure veterans received the outstanding refunds.

Investigators stated it was “troubling” that the VA failed to enforce its own rules for identifying and issuing the refunds upon determining that a veteran was found to be disabled or to have improperly paid the fees. VA loan managers told investigators they were focusing on more urgent priorities and were preoccupied with processing high volumes of loan applications in the subsequent years.

VA officials “generally agreed” with the watchdog findings and said they were speaking to lawyers about complexities linked to issuing refunds. The agency did not provide details about any plans to ensure veterans received the owed payments.

The VA announced in May that it was now informing veterans who purchase homes under the loan program about their exemption from the fees if they are disabled or later found to be disabled. Fees can total up to 3.3 percent of a home’s value.

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Learn more at David W. Magann, P.A. Main Office: 156 West Robertson Street Brandon, FL 33511 Call: (813) 657-9175 Tampa Office: 18715 N Dale Mabry Hwy Lutz, FL 33548