Veterans Affairs officials have paid out more than $400 million in refunds of home loan funding fees in the wake of an inspector general’s report that tens of thousands of veterans were improperly tagged with extra costs when applying for the loans.
Department officials said they reviewed 130,000 cases over the summer to look for errors, which mostly involved simple clerical mistakes or disability ratings changes after veterans settled on their loans.
Under existing rules, veterans and service members must pay a VA funding fee when they apply for a VA home loan, with costs between 0.5 percent and 3.3 percent of total money lent. The money is designed to defray some administration costs for the department, but disabled veterans are exempt from the fee.
However, an inspector general report released earlier this year found that at least 53,000 disabled veterans had been charged the fees in recent years. VA officials announced in May they would review current and past loans, and contact veterans eligible for refunds.
In a statement, VA Secretary Robert Wilkie said the effort stretched back as far as 20 years ago. “Our administration prioritized fixing the problems and paid veterans what they were owed.”
The payout total was significantly above the nearly $290 million total investigators estimated earlier this year. Those refunds ranged from a few thousand dollars to more than $20,000 for some individuals.
VA officials also announced a new policy guidance for lenders to ensure they are asking veterans applying for the loans about their disability status, and establishing new internal processes for oversight over future loan applications which may qualify for waived fees.
The department has also planned new outreach efforts to help inform veterans of the waivers they are eligible to receive.
Officials said they consider their review of the issue now complete, but veterans who believe they may be entitled to a refund for mistaken fees can contact the department’s regional loan center office at (877) 827-3702 or visit the VA’s website for more information.
Leo covers Congress, Veterans Affairs and the White House for Military Times. He has covered Washington, D.C. since 2004, focusing on military personnel and veterans policies. His work has earned numerous honors, including a 2009 Polk award, a 2010 National Headliner Award, the IAVA Leadership in Journalism award and the VFW News Media award.