VA Home Loan Navigator Act

This Act may be cited as the “VA Home Loan Navigator Act”.

(a) In general.— Chapter 37 of title 38, United States Code, is amended by inserting after section 3737 the following new section:

“3738. Borrower support services for housing loans.—

(a) Establishment.— The Secretary shall establish a program under which the Secretary shall provide services described in subsection (b) to veteran borrowers and other eligible borrowers to assist such borrowers in navigating the housing loan benefits under this chapter.

(b) Authorized services.— The services described in this subsection include—

(1) education regarding the housing loan benefits under this chapter;

(2) assistance obtaining or resolving issues relating to a certificate of eligibility for such benefits;

(3) counseling regarding the origination, refinancing, and closing processes for housing loans;

(4) guidance regarding appraisal requirements, property standards, and loan documentation;

(5) assistance navigating loan servicing matters;

(6) counseling relating to loss mitigation options and foreclosure prevention;

(7) coordination between borrowers, mortgage servicers, and the Department of Veterans Affairs; and

(8) education regarding costs, fees, and financial obligations associated with housing, including commissions of brokers.

(c) Voluntary; no cost.— Receipt of services described in subsection (b) shall be provided only to borrowers who choose to receive them and shall be provided at no cost to the borrower.

(d) Use of entities designated by the Secretary.—

(1) The Secretary may provide the services described in subsection (b) through entities designated by the Secretary under subsection (e) and may enter into contracts or other agreements with such organizations to provide such services.

(2) In providing such services, an entity so designated—

(A) shall act solely as an independent, neutral intermediary; and

(3) may not act as an agent of, or on behalf of, any mortgage lender, servicer, or real estate professional.

(e) Designation of entities.—

(1) The Secretary may designate an entity under this subsection only if the entity—

(A) is approved by the Secretary of Housing and Urban Development as a housing counseling agency;

(B) is a nonprofit organization with a primary mission of serving veterans, members of the United States Armed Forces, or military families;

(C) demonstrates expertise in Department of Veteran Affairs home loan benefits;

(D) demonstrates expertise in housing counseling, financial literacy, foreclosure prevention, rental guidance, and housing issues affecting the military and veteran community;

(E) demonstrates the capacity to provide services on a multi-State or national basis;

(F) demonstrates the capacity to develop, administer, and oversee training, certification, and performance standards for the individual counselors providing services under this section.

(2) In selecting entities for designation under this subsection, the Secretary shall prioritize entities with demonstrated experience delivering housing counseling and financial literacy services to the military-connected community.

(f) Certification of individual counselors.—

(1) The Secretary shall, in consultation with the Secretary of Housing and Urban Development, certify individuals as counselors authorized to provide services under this section. In doing so, the Secretary shall—

(A) specify the requirements that the individual must meet for initial certification and recertification, including requirements relating to continuing education and ongoing training; and

(B) require such an individual to be recertified not less frequently than every three years.

(2) The Secretary may enter into contracts or other agreements with nonprofit organizations to carry out the activities under this subsection.

(g) Independence of services.—

(1) An entity providing services under this section—

(A) shall ensure that such services are operationally and financially independent from mortgage origination, servicing, and real estate brokerage activities; and

(B) shall not refer or direct any borrower receiving such services to any entity affiliated with or related to the entity providing such services.

(2) Paragraph (1) does not prohibit an entity that provides services under this section from maintaining separate lines of business, including affiliated entities engaged in mortgage or real estate activities, as long as the entity has implemented firewalls or other controls as the Secretary considers appropriate and all other requirements of this section are met.

(h) Conflict-of-interest protections.—

(1) An entity designated under subsection (e), and any employee, officer, or contractor of such an entity, shall not—

(A) receive any compensation, referral fee, or other remuneration, directly or indirectly, from—

(i) a mortgage lender or mortgage servicer;

(ii) a real estate broker or agent; or

(iii) any entity providing loan modification, refinancing, or foreclosure-related services;

(B) refer a borrower to any specific commercial provider in exchange for anything of value; or

(C) engage in any activity that compromises the independence of the services provided under this section.

(2) Each entity designated under subsection (e) shall provide clear and timely disclosure to borrowers and to the Secretary of any actual or potential conflicts of interest, including any affiliated business relationships.

(3) The Secretary shall establish procedures to ensure services under this section are provided in a manner that preserves borrower choice, ensures full transparency, and complies with applicable Federal consumer protection laws.

(i) Coordination with Housing and Urban Development.— To the maximum extent practicable, the Secretary shall carry out the activities under this section in consultation with the Secretary of Housing and Urban Development and in a manner that makes effective use of the housing counseling activities of the Department of Housing and Urban Development, including the certification, training, and reporting activities of the Department of Housing and Urban Development, subject to any changes that the Secretary considers appropriate to account for the authorities, missions, and operations of the Department of Veterans Affairs.

(j) Enforcement.— The Secretary may—

(1) suspend or revoke the designation of any entity, or the certification of any individual, under this section; and

(2) refer cases of fraud, abuse, or unlawful activity to the Attorney General.

(k) Report.— Not later than two years after the date of the enactment of this Act, and on annual basis for each of the next four years thereafter, the Secretary shall submit to the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives a report on the program under this section. The report shall evaluate the effectiveness of the program with respect to—

(1) borrower satisfaction;

(2) utilization of housing loan benefits;

(3) foreclosure prevention outcomes;

(4) loss mitigation completion rates;

(5) redefault rates following loss mitigation; and

(6) cost-effectiveness of services provided.”.

(b) Clerical amendment.— The table of sections at the beginning of chapter 37 of title 38, United States Code, is amended by inserting after the item relating to section 3737 the following new item: