BVA9500365 DOCKET NO. 93- 05 235 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in Jackson, Mississippi THE ISSUE Waiver of recovery of loan guaranty indebtedness. ATTORNEY FOR THE BOARD L. M. Barnard, Counsel REMAND The veteran served on active duty from January 1970 to December 1973. This appeal arises from a February 1985 decision of the Committee on Waivers and Compromises of the Jackson, Mississippi, Department of Veterans Affairs (VA), Regional Office (RO), which denied the appellant's request for a waiver of loan guaranty indebtedness in the amount of $7,667.50, plus accrued interest. History of the case In September 1981, the appellant purchased a home in Jackson, Mississippi, for $30,000, using a home mortgage loan which was guaranteed, in part, by VA. 38 U.S.C.A. §§ 3701 et seq. (West 1991). The property was secured by a Deed of Trust and a Deed of Trust Note. The first mortgage payment was made November 1, 1981. In February 1982, the lender notified VA that the mortgage had not been paid since December 1, 1981. Between December 10, 1981 and February 9, 1982, six notices were sent to the appellant. On January 20, 1982, a personal interview was held at the appellant's home, at which time he stated that he did not have the money because he had missed five days of work because of snow (he was a truck driver). On the ninth of February he commented that his sister was responsible for mailing payments and that he did not know why the payment was late. All other financial obligations were current. He stated that he would pay by February 26, 1982. He appeared unconcerned about the delinquency. On February 26, 1982, VA sent a letter to the appellant encouraging him to reinstate his loan. On March 5, 1985, the lender notified VA that the loan had been reinstated. In May 1982, the lender notified VA that no mortgage payment had been made since March 1, 1982. Again, he appeared unconcerned. He stated that he had defaulted because he was now working in the warehouse for fewer wages. The lender tried to contact the appellant on numerous occasions, but he failed to respond. On May 11, 1982, the appellant stated that he would bring the account current some time in June. He promised to call but did not. In June 1982, the appellant's fiancee called. She stated that she would be handling the account because the appellant worked odd hours. She reiterated his contention that his salary had been reduced. She expressed an interest in either a Deed in Lieu of Foreclosure or in selling the property; she stated that she would talk to the appellant. That same month, the RO contacted the appellant, noting the importance of reinstating the account. However, in June, a Notice of Intention to Foreclose was issued. The RO again contacted the appellant in June 1982, noting his various options to avoid foreclosure. In July 1982, the appellant contacted the RO. He stated that he was still working decreased hours, although he expected to be working more in the coming month. He stated that he was not interested in a Deed in Lieu of Foreclosure because a sizable loss was involved. Refunding also did not appear to an option because he could not afford it on his current income. The home was sold on September 7, 1982 for $25,600. In September 1982, the mortgage holder filed a claim under the loan guaranty. The mortgage holder was paid by VA and the related debt was charged to the appellant. The appellant requested a waiver if this indebtedness. In February 1985, the Committee on Waivers and Compromises issued its decision. It was found that there was no evidence of fraud, misrepresentation, material fault or lack of good faith on the part of the appellant. While the appellant was noted to be at fault in the creation of the indebtedness, it was not found to be material in nature; therefore, a waiver was considered. It was then found that recovery of the indebtedness over time would not cause an undue financial hardship. Analysis A waiver of loan guaranty indebtedness may be authorized in a case in which collection of the debt would be against equity and good conscience. 38 U.S.C.A. § 5302(b). The concept of equity and good conscience includes a number of elements, including fault, balancing of faults, and a determination of whether repayment of an indebtedness would cause undue financial hardship to the appellant. In order to make the latter determination, there must be adequate and current evidence of the appellant's financial status of record. In the instant case, it is noted that the appellant last filed a financial status report in February 1985. Clearly, the evidence of record does not reflect the appellant's current financial status. It is also noted that the appellant's request for a waiver has not been considered under the current regulations relating to equity and good conscience. Under the circumstances of this case, it is the finding of the undersigned that additional assistance is necessary, and this case is REMANDED to the RO for the following: 1. The RO should request that the appellant fill out and return a complete Financial Status Report (VA Form 4-5655). This should include all sources of income. He should also report all monthly expenses as specifically as possible. 2. Once the above-requested information has been received, the RO should readjudicate his claim under the current laws and regulations pertaining to fault and equity and good conscience. 3. In the event that the appellant's claim remains denied, in whole or in part, the RO should issue a supplemental statement of the case to the appellant, which contains all requisite laws and regulations relating to fault and equity and good conscience. He should then be given an opportunity to respond. The case should then be returned to the Board for further appellate consideration if otherwise in order. KENNETH R. ANDREWS, JR. Member, Board of Veterans' Appeals The Board of Veterans' Appeals Administrative Procedures Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___ (1994), permits a proceeding instituted before the Board to be assigned to an individual member of the Board for a determination. This proceeding has been assigned to an individual member of the Board. Under 38 U.S.C.A. § 7252 (West 1991), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Veterans Appeals. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (1993).