VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues

va-m26-7-ch09

VA Pamphlet 26-7 Chapter 9 governs legal instruments, liens, escrows and related closing issues on VA loans.

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source:
  type: regulation
  id: va-m26-7-ch09
  authority: VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues
  description: |
    VA Pamphlet 26-7 Chapter 9 governs legal instruments, liens, escrows
    and related closing issues on VA loans.
  effective_date: '2019-07-30'
obligations:
  - id: va-m26-7-ch09-security-instrument-required-clauses
    canonical_id: va-m26-7-ch09-security-instrument-required-clauses
    section: VA M26-7 Ch. 9 — Security Instrument Required Clauses
    description: |
      [CLOSER] must ensure that the security instruments used on VA loans
      establish the required lien, comply with the laws and regulations
      governing VA's home loan program, comply with applicable state laws,
      and contain the required VA clauses (assumption approval,
      acceleration, funding fee, processing charge, and indemnity
      liability assumption).
    type: do
    audit_question: For every VA loan closed, can [CLOSER] evidence that the security instrument (i) establishes the required lien, (ii) complies with VA home-loan laws and regulations, (iii) complies with applicable state law, and (iv) contains all five required VA clauses (assumption approval, acceleration, funding fee, processing charge, indemnity liability assumption)?
    program_review: Does the program ensure the security instrument establishes the required lien, complies with VA home-loan laws/regulations and applicable state law, and contains all five required VA clauses (assumption approval, acceleration, funding fee, processing charge, indemnity liability assumption)?
    file_review: Spot-check closed loans; confirm the security instrument contains the required lien and all five VA clauses, and conforms to state law.
    judgment: false
    feeds: []
    workflow_phase: closing
    owner_role: closer
    secondary_owner_role: compliance_officer
    cadence: per_loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - va
      - m26-7
      - ch09
      - security-instrument
      - va-clauses
      - promoted
    primary_source:
      tier: 1
      authority: VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues
      source_class: va-handbook-m26-7
      source_url: https://benefits.va.gov/WARMS/M26_7.asp
      snapshot_id: 23782f6842a5daf5
      fetched_at: '2026-05-23T01:50:00Z'
      content_hash: sha256:b7c7fcb001b1097e51e4479c70f74c0d981cc1a7a38109e8cd455e205071d9e8
      paragraph_quote: 'Lenders must ensure that the security instruments they use: '
      drafter_attestation: Copied verbatim from VA Handbook snapshot 23782f6842a5daf5 (M26-7 Ch. 9 — Security instrument clauses) at 2026-05-23. Source PDF retrieved via Wayback Machine.
      effective_date: '2019-07-30'
      effective_date_source: va-change-date-preceding
    promoted_at: '2026-05-23T02:07:57+00:00'
    promoted_from: va-m26-7-ch09-roundb-v1.yaml
  - id: va-m26-7-ch09-verify-veteran-alive-not-mia
    canonical_id: va-m26-7-ch09-verify-veteran-alive-not-mia
    section: VA M26-7 Ch. 9 — Veteran Alive / Not MIA Verification at Closing
    description: |
      [CLOSER] must always verify that the Veteran is alive at the time of
      loan closing, whether or not the Veteran is an Active Duty Service
      Member (ADSM). If on active military duty, the Veteran must not be
      missing in action (MIA). [CLOSER] must also make the prescribed
      written certification at the time of loan closing.
    type: do
    audit_question: For every VA loan closed, can [CLOSER] evidence (i) verification that the Veteran was alive at the time of closing and not MIA if on active duty, with supporting correspondence from the Veteran or a commanding officer's statement, and (ii) the prescribed lender certification of alive-and-not-MIA status executed at closing?
    program_review: Does the program ensure the Veteran is verified alive at closing (and not MIA if on active duty), with supporting correspondence, and that the prescribed alive-and-not-MIA certification is executed at closing?
    file_review: Spot-check closed loans; confirm the alive/not-MIA verification (Veteran or commanding-officer correspondence) and the executed certification.
    judgment: false
    feeds: []
    workflow_phase: closing
    owner_role: closer
    secondary_owner_role: compliance_officer
    cadence: per_loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - va
      - m26-7
      - ch09
      - veteran-alive
      - mia
      - closing-certification
      - promoted
    primary_source:
      tier: 1
      authority: VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues
      source_class: va-handbook-m26-7
      source_url: https://benefits.va.gov/WARMS/M26_7.asp
      snapshot_id: 23782f6842a5daf5
      fetched_at: '2026-05-23T01:50:00Z'
      content_hash: sha256:b7c7fcb001b1097e51e4479c70f74c0d981cc1a7a38109e8cd455e205071d9e8
      paragraph_quote: The lender must always verify that the Veteran is alive at the time of loan closing, whether or not the Veteran is an ADSM in the military.
      drafter_attestation: Copied verbatim from VA Handbook snapshot 23782f6842a5daf5 (M26-7 Ch. 9 — Veteran alive/MIA) at 2026-05-23. Source PDF retrieved via Wayback Machine.
      quote_healed: true
      effective_date: '2019-07-30'
      effective_date_source: va-change-date-preceding
    promoted_at: '2026-05-23T02:07:57+00:00'
    promoted_from: va-m26-7-ch09-roundb-v1.yaml
  - id: va-m26-7-ch09-determine-insurance-coverage
    canonical_id: va-m26-7-ch09-determine-insurance-coverage
    section: VA M26-7 Ch. 9 — Hazard/Flood Insurance Minimum Coverage Determination
    description: |
      [CLOSER] must determine the minimum insurance coverage needed to
      meet the requirements of 38 CFR 36.4329 for a specific VA loan.
      Provided the required coverage is maintained (and there has been
      no change in the nature, value, or use of the security requiring
      new or additional coverage), no future guaranty claim can be reduced
      due to inadequate coverage.
    type: do
    audit_question: For every VA loan, can [CLOSER] evidence its determination of the minimum hazard/flood insurance coverage required to satisfy 38 CFR 36.4329 for that specific loan, and confirmation that the determined coverage was in force at and after closing?
    program_review: Does the program ensure the minimum hazard/flood coverage required by 38 CFR 36.4329 is determined for each loan and confirmed in force at and after closing?
    file_review: Spot-check files; confirm the §36.4329 minimum-coverage determination and that the determined coverage was in force at closing. The officer judges whether the determined coverage level adequately meets §36.4329 for the property.
    judgment: true
    feeds: []
    workflow_phase: closing
    owner_role: closer
    secondary_owner_role: compliance_officer
    cadence: per_loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - va
      - m26-7
      - ch09
      - hazard-insurance
      - flood-insurance
      - 38cfr-36.4329
      - promoted
    primary_source:
      tier: 1
      authority: VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues
      source_class: va-handbook-m26-7
      source_url: https://benefits.va.gov/WARMS/M26_7.asp
      snapshot_id: 23782f6842a5daf5
      fetched_at: '2026-05-23T01:50:00Z'
      content_hash: sha256:b7c7fcb001b1097e51e4479c70f74c0d981cc1a7a38109e8cd455e205071d9e8
      paragraph_quote: losses (unless a waiver has been granted). The lender must determine the minimum insurance coverage needed to meet the requirements of 38 C.F.R.
      drafter_attestation: Copied verbatim from VA Handbook snapshot 23782f6842a5daf5 (M26-7 Ch. 9 — Insurance coverage determination) at 2026-05-23. Source PDF retrieved via Wayback Machine.
      quote_healed: true
      effective_date: '2019-07-30'
      effective_date_source: va-change-date-preceding
    promoted_at: '2026-05-23T02:07:57+00:00'
    promoted_from: va-m26-7-ch09-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-23T02:07:57+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\va-m26-7-ch09-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

VA M26-7 Ch. 9 — Security Instrument Required Clauses

Effective 2019-07-30 · VA Change Date for this topic

Lenders must ensure that the security instruments they use:

Source: VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues · source URL · snapshot 23782f6842a5daf5

VA M26-7 Ch. 9 — Veteran Alive / Not MIA Verification at Closing

Effective 2019-07-30 · VA Change Date for this topic

The lender must always verify that the Veteran is alive at the time of loan closing, whether or not the Veteran is an ADSM in the military.

Source: VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues · source URL · snapshot 23782f6842a5daf5

VA M26-7 Ch. 9 — Hazard/Flood Insurance Minimum Coverage Determination

Effective 2019-07-30 · VA Change Date for this topic

losses (unless a waiver has been granted). The lender must determine the minimum insurance coverage needed to meet the requirements of 38 C.F.R.

Source: VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues · source URL · snapshot 23782f6842a5daf5

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Operationalizing VA Lender Handbook M26-7 Chapter 9 — Legal Instruments, Liens, Escrows, and Related Issues

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Source of record: https://claudeforcompliance.com/regs/va-m26-7-ch09/ · register va-m26-7-ch09 · Claude for Compliance. Free to read and download; see regulatory updates and methodology.