The Department of Veterans Affairs has issued guidance clarifying the effect of guaranteed claim payments on a veteran’s home-loan entitlement. According to the guidance, a veteran loses a part or all of his VA home-loan benefit when the agency pays a claim on a loan terminated by a foreclosure, short sale or deed-in-lieu of foreclosure. For VA loans originated on or after Jan. 1, 1990, the VA will no longer establish debts against veterans after it pays a claim to reimburse a servicer for its loss. Reimbursement could be up to the maximum guaranty amount. On the other hand, the agency may establish a debt against the veteran and pursue collection if the loan was originated prior to Jan. 1, 1990. If the veteran wants to reuse the VA home-loan benefit, he or she must fully reimburse VA for its losses in order to restore full entitlement. The loss only affects the veteran’s entitlement under the VA Home Loan guaranty program and ...