BVA9503067 
DOCKET NO.  93-04 366     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Waco, Texas

THE ISSUE

Recovery of direct loan post-foreclosure deficiency indebtedness.

REPRESENTATION

Appellant represented by: The American Legion

ATTORNEY FOR THE BOARD

Michael A. Pappas, Associate Counsel

INTRODUCTION

The appellant retired from active duty with the United States Air
Force in February 1981 following over 21 years of service.

This matter came before the Board of Veterans' Appeals (the
Board) on appeal from a decision on waiver of indebtedness of a
Department of Veterans Affairs (VA) Regional Office's Committee
on Waivers and Compromises (RO) in Waco, Texas.  The appellant's
direct loan post-foreclosure deficiency indebtedness was
originally established in November 1991, in the total amount of
$50,357.36, plus accrued interest.  A May 1992 decision on waiver
of indebtedness granted the appellant a partial waiver of that
indebtedness, in the amount of $30,357.36, plus accrued interest,
but denied a waiver as to the remainder, in the amount of
$20,000.00, plus accrued interest.  The appeal was received and
docketed at the Board in February 1993.  The appellant has been
represented throughout his appeal by the American Legion.  That
organization submitted additional written argument to the Board
in September 1993.

REMAND

The appellant's direct loan post-foreclosure deficiency debts that
are the subject of the current appeal emanated from the November
5, 1991 foreclosures of four separate direct VA loans.  All of the
properties sold at foreclosure that had been the subject of these
loans were located in Copperas Cove, Texas.  For the record, the
loans and their respective resulting deficiency debts can be
identified utilizing their VA loan numbers, as follows:  LH [redacted],
$10,237.51; LH [redacted], $14,613.45; LH [redacted], $14,662.70; and LH
[redacted], $10,843.70.  Upon application for a waiver, the appellant's
four separate debts were judiciously consolidated, and the May
1992 waiver decision of the RO in Waco, Texas addressed them as
one debt.

Following the Board's receipt of the current appeal, in March
1993, the appellant applied for a waiver of yet another debt to
the VA.  This debt, in the amount of $9,854.77, emanated from the
foreclosure of VA Loan Number LH [redacted], a loan that had been
secured by real property located in San Antonio, Texas.  An April
1993 decision on waiver of the RO in Houston, Texas denied the
appellant's waiver request.  In May 1993, the appellant filed a
Notice of Disagreement with the aforementioned determination of
the Houston, Texas, RO.  In conjunction with that Notice, the
appellant asked that the two cases (ostensibly, the instant case
on appeal from a determination of the Waco, Texas, RO, and the
case involving VA Loan Number LH [redacted], now before the Houston,
Texas, RO) be "combined so that all of the facts can be reviewed
by the same members at the same time."

The United States Court of Veterans Appeals has held that, if a
recently-raised issue is "inextricably intertwined" with the issue
or issues certified for appeal, they must be considered
simultaneously.  Harris v. Derwinski, 1 Vet.App. 180 (1991).
Since the issue of waiver of the debt now under consideration by
the Houston, Texas, RO has the potential for interdependency with
the issue of waiver currently certified for appeal, they can, in
effect, be considered as inextricably intertwined and
consequently, must be considered simultaneously.  Id.

Further, in conjunction with the appellant's March 1993 request
for a waiver that was directed to the Houston, Texas, RO, he
submitted additional evidence pertaining to his current financial
status.  Although undated, that evidence is relevant to the
instant appeal as it pertains to whether the enforcement of
collection of the indebtedness against the appellant would result
in an undue hardship to him.  "Undue hardship" is one of the
enumerated elements for consideration in a determination of
whether equity and good conscience would necessitate a waiver.
38 C.F.R. § 1.965(a) (1994).  This evidence must be considered by
the RO before it is considered by the Board.  38 C.F.R. §
20.l304(c) (l994).

Under the circumstances of this case, the Board is of the opinion
that the case should be remanded to the RO in Waco, Texas for the
following:

1.  The appellant should be provided with a
copy of this remand and another financial
status report form (VA Form 4-5655) and
asked to provide a current signed and dated
financial status report.  The RO should also
request from the appellant complete copies,
including all scheduled attachments, of his
Federal income tax returns for 1991 through
1994, along with the updated financial
status report.  The current financial status
report should include financial information
of any property management companies or real
estate holding companies owned by the
appellant or his spouse.  To the extent
possible, the appellant should provide
written documentation or verification of all
items contained in the financial status
report, particularly the value of his real
property assets in terms of published county
tax assessments.  The appellant should also
be asked to submit any other information,
evidence, or arguments that may be pertinent
to this appeal.

2.  In deference to the request of the
appellant, the RO in Waco, Texas should
contact the RO in Houston, Texas in an
effort to consolidate the case currently on
appeal with the case currently before the RO
in Houston, Texas.  District Counsel should
be consulted to determine whether there are
any jurisdictional or other due process
restrictions that would preclude the
consolidation of these cases.  If so, an
effort should be made by the RO in Waco,
Texas, to coordinate their waiver
determination with any waiver determination
made by the RO in Houston, Texas.  A
concerted effort should then be made to
assure that both cases are received at, and
adjudicated by, the Board simultaneously.

3.  The appellant's claim, whether involving
a consolidated case or not, including
documents submitted by the appellant since
the receipt of his claim at the Board,
should then be reviewed by the RO in Waco,
Texas.  If the benefit sought continues to
be denied, the appellant and his
representative should be provided with a
supplemental statement of the case.  That
supplemental statement of the case should
specifically address those of the six
elements found in 38 C.F.R. § 1.965 which
the RO considers to be pertinent to the
determination of whether the appellant
should be accorded a waiver of his loan
guaranty indebtedness under the standards of
"equity and good conscience."  The RO should
also identify any other elements which
should be applied to the facts and
circumstances of this case indicating a need
for reasonableness and moderation in the
exercise of the Government's rights.

If the benefit sought is not granted, the appellant should be
given an adequate opportunity to respond prior to the forwarding
of the appeal to the Board.  The purpose of this remand is to
procure clarifying data and to ensure due process of law.  The
Board intimates no opinion, legal or factual, as to the
determination warranted in this case by reason of this remand.  No
action by the appellant is required, until he is so notified.

          THOMAS J. DANNAHER
          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).