Effective Immediately: VA Circular on Show Me Decision

VA has published Circular 26-26-2 entitled, “Terminating VA-Guaranteed Loans Where VA Has a Partial Claim Interest”. For mortgage servicers, this is impactful Circular is extremely important as it clarifies and allows for Servicers to proceed non-judicially on a VA Partial Claim pursuant to the Show Me decision. It is effective immediately.

The Circular also addresses in-flight foreclosures, stating that “Servicers that initiated judicial foreclosure before August 11, 2026, to discharge properties from VA’s partial claim interest can continue with the judicial process. If switching to a non-judicial foreclosure under state law would reduce time and costs without jeopardizing the interest in the guaranteed loan, servicers may re-initiate foreclosure using a non-judicial process. However, the maximum allowed for foreclosure attorney fees will be capped at the amount VA allows for judicial foreclosure in the applicable state.”

Read the VA's full Circular.