VA Loan Guaranty Maximum Allowable Fees Increase

Padgett is announcing that the VA will publish updated Maximum Allowable Fees for Legal Services in the Federal Register on September 16, 2025. These new fees will apply to all guaranty claims submitted to the VA for loans terminated on or after thirty (30) days from the publication date.

Background behind the increase in Foreclosure Fees:

• “The Secretary is required to annually review allowances for legal fees in connection with the foreclosure of single-family housing loans, including bankruptcy-related services, issued by the Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac).”
• “VA reviewed and considered the updated legal fees allowed by each entity. After considering increases in fees for legal services announced by these Government-related home loan programs, the Secretary is publishing a table in the Federal Register setting forth the revised amounts the Secretary has determined to be reasonable and customary. The table reflects the primary method for foreclosing in each state, either judicial or non-judicial, with the exception of those states where either judicial or non-judicial is acceptable. The use of a method not authorized in the table will require prior approval from VA. 38 CFR 36.4314(b)(5)(ii). This table will be available throughout the year at www.benefits.va.gov/HOMELOANS/servicers_valeri_rules.as”.

Updates to Bankruptcy Fees:

• “There has been no change to the amounts VA will allow for bankruptcy filing fees, but VA is increasing the amount allowed for multiple bankruptcy filings under either chapter to be consistent with Freddie Mac.”
• “The new fee is reflected in the following table. Neither Fannie Mae nor HUD lists multiple bankruptcy filings in their Allowable Bankruptcy Attorney Fees Exhibit. VA will continue to monitor fees for legal services on an annual basis and publish updates in the Federal Register as VA deems necessary.”

• For multiple bankruptcy filings under either chapter, VA will allow an additional $500.

• VA will allow attorney fees of $1,050 (Chapter 7) or $1,500 (initial Chapter 13) for an initial bankruptcy filing, regardless of whether a bankruptcy release is obtained. For multiple bankruptcy filings under either chapter, VA will allow an additional $600.”

When the Revised Fees Apply:

• “The revised table will apply to all guaranty claims submitted to VA for loans terminated on or after 30 days of the date of publication in the Federal Register.”
• “The holder’s fees for legal services are incurred prior to loan termination.

• However, as noted herein, holders have up to one year after loan termination in which to file a claim for payment under the guaranty. See 38 CFR 36.4324(d)(1)(i). As such, VA will apply the revised fees to future loan terminations to avoid holders being subject to different maximum allowable rates for legal services incurred on the same date solely because of when the holder submits the claim for payment under the guaranty.”

Additional links:

Link to the Scheduled Notice for Publication

VA Allowable Attorney Fees 2021

Updated Allowable Attorney Fees