Lead Opinion
In 1971, appellees John and Dolores Rank bought a home financed through a mortgage guaranteed by the Veterans Administration (VA) pursuant to the VA Home Loan Guarantee Program, 38 U.S.C. § 1801 et seq. In 1976, the mortgage was foreclosed. The Ranks subsequently brought suit against the VA and the Kissell Company, a private firm that serviced the mortgage, seeking to set aside the foreclosure. On cross-motions for summary judgment based upon stipulated facts, the district court held that the VA Act and various publications distributed by the VA to implement the loan guarantee program created a duty on the part of the VA and private lenders to take all reasonable measures to avoid foreclosure; that the VA and Kissell had breached this foreclosure avoidance duty; and that the veteran borrower could enforce this duty in an equitable action to set aside a foreclosure. The district court further held that the VA’s failure to refund to the lender the unpaid balance of the Ranks’ loan and receive an assignment of the loan, as authorized by 38 U.S.C. § 1816(a), constituted an abuse of discretion and that the VA had illegally failed to exercise its discretion because it refused to implement an assignment program in the Los Angeles region. Judgment was entered setting aside the mortgage foreclosure, and this appeal followed.
I.
Statutes, Regulations, and Publications
The policy of the VA housing program “is, broadly stated, to enable veterans to obtain loans and to obtain them with 'the least risk of loss upon foreclosure, to both the veteran and the Veterans Administration as guarantor of the veteran’s indebtedness ...” United States v. Shimer,
The veteran obtains the guaranteed loan from private commercial lenders.
Upon default by a veteran on his mortgage, the private lender must notify the VA within forty-five days, 38 C.F.R. 36.4315, and if the lender intends to foreclose, he may not begin legal proceedings until thirty days after delivering a notice of his intent to the VA. 38 C.F.R. 36.4317. Upon foreclosure, the lender, if he turns out to be the purchaser, generally may convey the property to the VA. 38 C.F.R. 36.4320.
An option known as “refunding” is available to the VA in cases of default. The “Administrator may, at the Administrator’s option, pay the holder of the obligation the unpaid balance of the obligation plus accrued interest and receive an assignment of the loan and security.” 38 U.S.C. § 1816(a); 38 C.F.R. 36.4318. The VA thus may take over defaulted mortgages from private lenders and avoid foreclosure by extending forebearance to the veteran.
In connection with its home mortgage program, the VA publishes, inter alia, a Lenders’ Handbook and issues circulars to its regional offices. The Lenders’ Handbook, VA Pamphlet No. 26-7 (Revised), is introduced by a note stating:
“[The Handbook is] designed to guide lenders in the processing of applications for loans . .. and in the treatment of defaults and claims arising through loans made. Nothing contained here shall be construed to modify or otherwise alter any provisions of the regulations.” The text of the Lenders’ Handbook provides, inter alia:
It is the policy of the VA, consistent with the beneficial nature of the law, to encourage holders [servicers] to extend all reasonable forebearance in the event a borrower becomes unable to meet the terms of his loan. Its purpose is to help veteran-borrowers retain their homes, farms and businesses without prejudicing the holders’ rights under their contracts of guaranty or insurance.... [I]t is not expected that holders will file claims or institute action to terminate loans, until every reasonable effort has been made to arrive at some other solution.
The Lenders’ Handbook advises lenders “to follow accepted standards of loan servicing employed by prudent lenders generally” and notes that the “VA may, where the circumstances warrant, supplement the holder’s efforts in connection with the servicing of defaulted loans.” It points out, however, that the loan guaranty “is in part predicated upon the understanding that adequate loan servicing will be performed by the holder” and that “[t]he VA does not prescribe how loans should be serviced.”
In Circular 26-75-8, sent to its employees in January 1975, the VA pointed to adverse economic conditions and ordered its employees to attempt to ameliorate veterans’ economic difficulties. Specifically, the VA employees were instructed to review carefully
Finally, VA Manual M26-3 (intended for use by VA employees) provides criteria, in cases of default, to guide VA employees in exercising the assignment/refunding option authorized by 38 U.S.C. § 1816(a). Paragraph 2.39(d) of that Manual states that refunding is permissible when it is “established beyond reasonable doubt that:
1. The refunding will be in the best interests of the VA.
2. The default was not willful.
3. The borrower is desirous of retaining his property.
4. The borrower is deserving of VA assistance.”
II.
The Factual Background
The material facts in this case were stipulated. In 1971 plaintiffs, John and Dolores Rank, bought a home in Pomona, California for $16,950 and financed their purchase through a loan for the full purchase price from the Trinity Mortgage Company. The VA guaranteed the loan pursuant to its housing program. Ultimately, after several transactions, the loan (which was secured by a deed of trust — i.e., a mortgage) and mortgage were assigned to the Government National Mortgage Association (GNMA), with a private mortgage firm called the Kissell Company acting as the servicing agent. The Ranks were to pay the Kissell Company $148 per month.
Throughout the 1973-74 period, the Ranks had difficulty making their loan repayments on time, but they eventually would cure their delinquencies. Beginning with the payment due in February 1975, however, the Ranks failed to make further payments. John Rank had been laid off from his $900 per month job in December 1974, and was subsisting on $360 per month in unemployment benefits, except for two months of salary as a welder. A Kissell representative, C. B. Cohen, subsequently met with the Ranks, but was unable to resolve the non-payment problem. A later meeting was similarly unsuccessful, as Cohen concluded that the Ranks’ expenses exceeded their income.
There were subsequent communications among Kissell, the VA, VAC, and the Ranks. Ultimately, though, Kissell sent to the VA, in September 1975, a Notice of Intention to Foreclose. It stated that the borrower’s “income is less than his expenses,” and that “no arrangements can be made due to the borrower’s financial problems”. Kissell gave notice to the Ranks of the impending foreclosure, and the VA informed the Ranks that it could do nothing for them. In early 1976, John Rank had obtained employment and made a new repayment proposal to Kissell, but it was refused.
In December 1975, a Notice of Default was recorded in Los Angeles County pursu
III.
District Court Proceedings and Decision
The Ranks filed this lawsuit in October 1976, seeking, in essence, an invalidation of the mortgage foreclosure and restoration of their ownership rights on the grounds that “defendants failed to perform adequate servicing as mandated by the Veterans’ Home Guaranty Program ...” and that the “VA abused its discretion by failing to consider plaintiffs for an assignment under 38 U.S.C. § 1816(a) ...” The Ranks also sought relief on the ground that the foreclosure of their mortgage “by non-judicial means” was “violative of the Fifth Amendment to the United States Constitution.”
On cross-motions for summary judgment, the district court ruled in favor of plaintiffs. Rank v. Cleland,
The court concluded from the stipulated facts that the VA and Kissell had violated their mandatory “foreclosure avoidance” duties in this case. “Veteran borrowers,” the district court said, “may maintain civil actions against private lenders and VA charging violation of statutory servicing requirements.”
The district court ruled finally that the VA’s refusal to take an assignment of the plaintiff’s home loan, and to refund it, pursuant to the statutory authorization of 38 U.S.C. § 1816(a), “was an abuse of discretion ... because plaintiffs clearly met VA’s own criteria for assignment set out in VA Manual M26-3, ...” and because the VA failed to supply reasons for not exercising the assignment/refunding option. The court stated as well that the VA’s failure to implement the assignment option in the Los Angeles region in 1974-76 “constituted an illegal failure to exercise discretion.”
The Ranks were ordered restored to their ownership position, and the VA was ordered to consider assignment/refunding and to provide reasons for any refusal to exercise that option.
This appeal followed.
The Foreclosure-Avoidance Issues
A. The VA Act
In Simpson v. Cleland,
We agree with the D.C. Circuit that neither the statutory language nor the legislative history of the VA Act provides any “indication of legislative intent ... to create such a remedy” against the private lender. Cort v. Ash,
More importantly, “mortgage foreclosure has traditionally been a matter for state courts and state law, and there are state law remedies available to protect mortgagors from unconscionable mortgages.” Roberts v. Cameron-Brown Co., supra,
B. The Administrative Procedure Act
The Ranks contend that even if no private cause of action can_be_ derived from the VAAct,' th¿~VAjs failure to take foreclp^rerayoidancei.measures is judicially, reviewable under_§_ 10_ofAhe^Administrati ve Procedure Act, 5 U.S.C. §§ 701 et seq.
5 U.S.C. § 702 states that “[a] person suffering legal wrong because of agency
1. Duty of the VA to Provide Supplemental Servicing
It is clear that the VA Act, by its terms, imposes no legal duty upon the VA to undertake loan servicing of VA-guaranteed loans. If such duty exists, it must be derived from statements found in the Lenders’ Handbook and VA circulars. We note at the outset “that not all agency policy pronouncements which find their way to the public can be considered regulations enforceable in federal court.” Chasse v. Chasen,
In this case, we need not reach the question whether the Handbook and circulars were the product of the requisite procedures, for we conclude that neither the VA Handbook nor VA Circular 26-75-8 purports to prescribe “legislative-type” rules enforceable in federal court against the VA. Rather, we view the portions of the Handbook and circulars cited by the plaintiffs as general statements of agency policy and procedure. VA Circular 26-75-8, for example, was issued in response to the economic recession of 1974-75 and was apparently intended as a general guide to VA employees in aiding veterans to weather the economic crisis of those years. To hold such a circular binding on the VA would “hamper seriously the ability of departmental administrators to communicate freely and flexibly with the employees of their departments by means of written directives.” Chasse v. Chasen,
Our conclusion that the Handbook and circulars do not create an enforceable duty on the part of the VA to take all reasonable measures to avoid foreclosure is in harmony with the numerous decisions of other courts that have held agency handbooks and circulars of this type unenforceable.
2. Assignment-Refunding
In addition to holding that the VA and the private lender breached a duty to provide adequate loan servicing, the district court held that the VA abused its discretion by failing to assign and refund the Ranks’ loan prior to foreclosure, as permitted by 38 U.S.C. § 1816(a). The VA, however, contends that the decision whether or not to exercise the assignment-refunding option is “committed to agency discretion” within file meaning of the Administrative Procedure Act, 5 U.S.C. § 701(a)(2), and thus is not reviewable under that Act.
Section 701(a)(2) states a “very narrow exception” to the mandate of the Administrative Procedure Act that the action of “each authority of the Government of the United States” is subject to judicial review. Citizens to Preserve Overton Park, Inc. v. Volpe,
The assignment-refunding section of the VA Act, 38 U.S.C. § 1816(a) provides in pertinent part:
Before suit or foreclosure the holder of the obligation shall notify the Administrator of the default, and within thirty days thereafter the Administrator may, at the Administrator’s option, pay the holder of the obligation the unpaid balance of the obligation plus accrued interest and receive an assignment of the loan and security.
The statutory language of this section makes clear that Congress intended to vest the widest discretion possible in the Administrator. Congress, in drafting § 1816(a), used the precatory “may” and then, as if to leave no doubt, added, “at the Administra
The decision to accept an assignment of a veteran’s loan necessarily involves a consideration of myriad factors, including, but not limited to, internal VA management considerations relating to budget and personnel, the risk of loss to the VA, the adequacy of prior loan servicing, and the circumstances of the borrower’s default. The application of these factors, as well as the determination of other relevant factors and the weight to be attributed to each, has been entrusted to the unfettered discretion of theVA. Even if legal standards for review could be divined, it is clear that, absent allegations that the agency has improperly considered factors outside those entrusted to its discretion, the decision whether to assign and refund raises issues not well-suited for determination by the courts. We thus conclude that the VA’s decision not to assign and refund appellees’ home loan is not judicially reviewable.-
The district court also held that the VA’s failure to assign and refund any loans in the Los Angeles region from 1974 through 1976 was a refusal to implement the assignment-refunding program and hence an illegal failure to exercise its discretion. Whether the VA is required to implement the assignment refunding program is essentially an issue of statutory interpretation and within the judiciary’s traditional area of expertise. See Natural Resources Defense Council, Inc. v. SEC,
Nothing in the statutory language or history of section 1816(a) indicates that Congress intended to require the VA to exercise the assignment-refunding option during the years 1974-76. Rather, the language of § 1816(a) indicates that Congress simply intended to empower the VA to refund, at its discretion, loans that are in default. By so doing, Congress provided an additional remedy that the VA may use in the event of inadequate loan servicing by the lender. See note 9, supra. Both the precatory language of § 1816(a) and the absence of any standards or procedures governing the administrator’s exercise of the assignment-refunding option, however, indicate that Congress intended to leave the decision when, if ever, to apply the assignment-refunding remedy within the sound discretion of the Administrator. [WJhere the duty to act turns on matters of highly debatable inference from large or loose statutory terms, the very construction of the statute is a distinct and profound exercise of discretion. We then must infer that the decision to act or not to act is left to the expertise of the agency burdened with the responsibility for decision. Panama Canal Co. v. Grace Line, Inc.,
V.
Constitutional Claim
The Ranks also claim that the VA deprived John Rank of his statutory entitlement to the benefits of the VA guaranty home loan program without affording him due process of law under the Fifth Amendment.
The Due Process Clause of the Fifth Amendment applies to actions of the federal government and not to individual activities of private actors. In order to apply the proscriptions of the Fifth Amendment to private actors “there must exist ‘a sufficiently close nexus between the [government] and the challenged action of the . . . [private] entity so that the action of the latter may be fairly treated as that of the [government] itself.’ ” Warren v. Government National Mortgage Ass’n,
In the present case, the alleged loss of the entitlement under the program was the direct result of foreclosure by the private lender under a valid contract between
For the foregoing reasons, the district court’s judgment is REVERSED.
Notes
. At the time plaintiffs received their loan, the amount was $12,500 rather than $27,500. 38 U.S.C. § 1810(c) (1970).
. The VA also has a direct home loan program, 38 U.S.C. § 1811, and a mortgage insurance program, 38 U.S.C. § 1815. These programs are not involved in the present case, which arose under the loan guaranty program.
. Cohen offered the Ranks the alternative of selling their house, obtaining a second mortgage, or making monthly payments equal to 1.5 times the regular monthly payments. The Ranks attempted unsuccessfully to obtain a second mortgage. They also tendered one month’s payment to Kissell, plus a small additional amount, in late May 1975. Kissell declined to accept the payment, pointing to the Ranks’ previous delinquencies and stating that “it is obvious that you cannot afford the property.”
. John Rank proposed that he pay $180 per month out of his $360 unemployment check (R. 112). The Ranks apparently never received a reply to this letter.
. The fact stipulation filed below contained, aside from the details of the Ranks’ particular case, a description of the operations at the Los Angeles VA Regional Office (R. 115-19). It was stipulated, inter alia, that the VA’s Los Angeles employees spent most of their time servicing the VA’s direct loans, not loans in the loan guaranty program; that the VA conducts supplemental servicing of guaranteed loans only when the veteran is in a solvent enough position that his default likely can be cured; that in 1974-76 the VA obtained no loans on assignment under 38 U.S.C. § 1816(a) and 38 C.F.R. 36.4318; that the Ranks did not know of the refunding option or that refunding had been denied; and that there are no regulations requiring that notice on refunding be given to borrowers like the Ranks.
. The court crossed out the Ranks’ proposed findings and conclusions on their alternative theory that the non-judicial foreclosure was unconstitutional. On appeal, the parties have been permitted to file supplemental briefs arguing the constitutional issue.
. The district court’s order was stayed pending the outcome of this appeal. In the meantime, the Ranks continue to reside in the house that is the subject of this litigation.
. In Cort v. Ash, the Court articulated four factors that inform the decision whether to imply a cause of action under a federal statute: whether the “statute createfs] a federal right in favor of the plaintiff”; whether there is “any indication of legislative intent ... to create such a remedy”; whether implying a remedy is “consistent with the underlying purpose of the legislative scheme”; and whether the cause of action is “one traditionally relegated to state law.” Cort v. Ash, supra,
. In addition, “it is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.” Transamerica Mortgage Advisors v. Lewis,
. There is also nothing in the record to suggest that the Ranks in any way relied to their detriment on VA Circular 26-75-8.
. Thorpe v. Housing Authority,
. The legislative history of the Act, although generally unilluminating, suggests that Congress did not envision mandatory supplemental servicing by the VA. The loan guarantee program was originally conceived as a direct loan program administered by the VA to veterans. Because of congressional concern that such a program would require the creation of a huge, unwieldy bureaucracy, the loan guarantee provisions, designed to induce private lenders to make the loans to veterans, were substituted for the direct loan program. See, e.g., 90 Cong. Rec. 4654 (1944) (remarks of Rep. Jeffrey).
. The dissent suggests that this construction deprives § 1816(a) of any meaning or purpose. We fail to understand, however, why it is meaningless to provide an administrative agen
Moreover, we are unable to discern what it is that the dissent would have the VA do. The dissent avoids any delineation of the “program” supposedly required by § 1816(a), no doubt because the statute and the legislative history are silent on the issue. Indeed, the dissent carefully specifies what it would not require of the VA and what it does not decide; yet it would give the VA no affirmative guidance beyond a vague admonition not to ignore the statute. We fail to understand what useful purpose would be served by such a standard-less directive.
. The Ranks contend that the VA is ultimately responsible for the loss of John Rank’s statutory benefits because the VA had authority to avoid the foreclosure by refunding their loan. The VA’s failure to exercise the assignment-refunding option of 38 U.S.C. § 1816(a) does not, however, give rise to a due process claim. We concluded above that § 1816(a) creates no judicially enforceable duty on the part of the VA; it follows that § 1816(a) creates no constitutionally protectable property interest, and that the VA’s decision not to exercise the assignment-refunding option did not implicate John Rank’s due process rights. See Board of Regents v. Roth,
Dissenting Opinion
dissenting.
I dissent from that part of the majority’s opinion which treats the VA’s refusal to exercise its discretion under section 1816(a).
The district court found that the VA refused to exercise section 1816(a) assignment authority during 1974-1976 in the Los Angeles region and concluded that in so doing the VA had illegally failed to exercise its discretion. The majority does not dispute the factual finding. Yet it reverses the district court’s conclusion of law and decides that the VA is merely “empower[ed]” to utilize assignment-refunding and is therefore free to ignore the existence of the statutory provision entirely, as the district court found it did here. Under this construction of the statute, the Administrator can refuse to exercise any of the discretion given him by section 1816(a), without providing or, more important, having any reason for so doing. This interpretation is unsupported by precedent or the rules of statutory construction. Therefore, I would affirm that portion of the district court’s judgment (1) finding that the VA’s failure to take any action regarding VA guaranteed home loans under section 1816(a) constitutes an illegal failure to exercise its discretion, and (2) requiring the VA to consider refunding and assignment of plaintiff’s loan obligation.
The majority concludes that the VA has no statutory duty to implement the provisions of section 1816(a), but cites only a dictum from Panama Canal Co. v. Grace Line, Inc.,
That authority is not persuasive here. So far as I can determine, Mr. Justice Douglas’ dictum has never been cited by any federal court. Moreover, the case itself has never been cited, nor relied on, by the Supreme Court in any of the dozens of later cases treating the reviewability of an agency’s action or inaction.
In other cases raising the question whether “agency action is committed to agency discretion by law,” 5 U.S.C. § 701(a)(2) (1976), current law requires a reviewing court “to determine ‘whether nonreviewability can fairly be inferred.’ ” Morris v. Gressette,
The majority’s treatment of our Circuit’s precedent is equally unsatisfactory. It merely purports to distinguish three cases supporting a view contrary to its own: Rockbridge v. Lincoln,
The majority’s rationale for distinguishing our applicable precedent is unpersuasive. The government, which suggested the rationale in its brief, gleans a Congressional intent in Rockbridge from the unsurprising idea that the statute there construed was “passed with a specific set of legislative objectives in mind.” I trust that neither the government nor the majority intends to imply that section 1816(a) was passed without any legislative objectives in mind. That proposition would violate the horn-book rule that statutes must be construed to have both meaning and purpose. In Professor Llewellyn’s formulation: “If a statute is to make sense, it must be read in the light of some assumed purpose. A statute merely declaring a rule, with no purpose or objective, is nonsense.” Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons about how Statutes are to be Construed, 3 Vand.L.Rev. 395, 400 (1950). Making that assumption, the majority’s suggestion appears to be that since section 1816(a) was incorporated in a statute which had only a general set of legislative objectives, Congress did not intend to require that the specific provision be implemented. Whatever may recommend this concept, the majority offers no reasoning or explanation in support of it.
In enacting section 1816(a) Congress quite sensibly refrained from instructing the VA as to the particular circumstances under which it should accept assignments of loans and refund them, preferring to leave these practical decisions to the discretion of the agency. The majority characterizes Congress’ action as an “absence of any standards or procedures governing the administrator’s exercise of the assignment refunding option .... ” Ante at 700, and then, relying on this supposed absence of standards, leaps to the conclusion that section 1816(a) need not be implemented. There is no precedent supporting this leap in logic; nor is there any basis for the majority’s newly discovered principle of administrative law — if standards are not set forth, the statute is lawful but the agency charged with its enforcement is free to ignore it.
The notion that Congress must or should state a standard, policy or principle in every regulatory statute is denied in the cases
Here, it seems clear that Congress intended to grant veterans as much reasonable forebearance in servicing their loans as possible. Indeed, just a year after the 78th Congress created the loan guarantee program, the 79th Congress extensively expanded its scope by adding three new sections allowing different financing techñiques to allow maximum forebearance. Act of December 28, 1945 ch. 588, § 8, 59 Stat. 623, 626 (1945) (current version in part at 38 U.S.C. § 1816 (1976)) (amending Serviceman’s Readjustment Act of 1944, ch. 268, §§ 500-505, 58 Stat. 284 (1944))
Earlier, in dealing with the question whether the court may review a particular decision of the VA not to refinance a specific loan, the majority approves the following contention of the VA: “[T]he decision whether or not to employ the assignment-refunding option is ‘committed to agency discretion’ within the meaning of the Administrative Procedure Act, 5 U.S.C. § 701(a)(2), and thus is not reviewable under that Act.” Ante at 699. I agree.6 But implicit in the VA’s (and the majority’s) contention is the proposition that the
agency must exercise the discretion which is committed to it. It must do so by making decisions as to whether or not to employ the assignment-refunding option. While we cannot review the agency’s decisions after it makes them, we can and must review the agency’s attempt to ignore its discretion and its failure to make any decisions at all.
The majority’s analysis suffers from other internal inconsistencies. For example, the statement at footnote 9, where the majority relies on the section 1816(a) “remedy” to support the conclusion that no private cause of action exists cannot be harmonized with the section of the opinion under discussion here. While I do not quarrel with the footnote 9 conclusion that Congress intended section 1816(a) to provide a remedy for veterans, I find it troublesome that the majority relies on the existence of that remedy as a basis for holding that veterans have no private right of action and then subsequently concludes that the VA may simply ignore the provision and, without any reason, deprive all veterans of this “remedy” entirely.
My conclusion is not that section 1816(a) assignments must be instituted once a month, once per thousand defaults or with any other particular frequency. Nor am I contending that we may review a decision by the VA not to pay the holder of an obligation the unpaid balance in a particular case in which the VA has made the specific judgment not to do so. My conclu
Because the majority legitimizes the VA’s neglect of its discretion, I dissent.
. In a different time, standardless Congressional delegations raised different issues. E.g., Panama Refining Co. v. Ryan,
As in Fahey, I would suggest that a standard-less statute indicates a Congressional judgment that the relevant policy issue is sufficiently complex so as to preclude the statement of specific standards. That judgment does not mean that Congress has retained the policy judgment of whether to create a program. Rather, it means that the basic framework of a
Armed with the “vague admonition” that the Administrator must exercise the discretion vested in him by Congress, I believe the VA could properly perform its job of determining when the assignment and refunding of loans should be made.
. E.g., 1 K. Davis Administrative Law Treatise § 3:5 (2d ed. 1978).
. See Rockbridge v. Lincoln,
“The Rule of Inferred Intent” assumes that every statute is logical and complete and that this completeness can provide appropriate meaning to unglossed terms. See Driedger, A New Approach to Statutory Interpretation, 29 Canadian Bar Review 838 (1951), reprinted in 4 Sutherland Statutory Construction 25, 26 (C. Sands ed.) (1975).
In Panama Refining Co. v. Ryan,293 U.S. 388 ,55 S.Ct. 241 ,79 L.Ed. 446 (1935), Justice Cardozo said: “[T]he meaning of a statute is to be looked for, not in any single section, but in all the parts together and in their relation to the end in view.” Id. at 439,55 S.Ct. at 256 . (Cardozo, J., dissenting) (citation omitted).
. The act also liberalized the legislative scheme by extending the time for loan applications, and providing an automatic 50% guaranty of agreed on loans. See H.R.Rep.No.1449, 79th Cong., 1st Sess. 602 (1945), reprinted in 1945 U.S.Code Cong. Serv. 935.
. This inference finds support in the statutory requirement that a lender notify the Administrator thirty days prior to suit or foreclosure. Section 1816(a) provides in part:
Before suit or foreclosure the holder of the obligation shall notify the Administrator of the default, and within thirty days thereafter the Administrator may, at the Administrator’s option, pay the holder of the obligation the unpaid balance of the obligation plus accrued interest and receive an assignment of the loan and security.
Thus in every case of potential default, a lender must send notice to the VA. There is nothing precatory about that. I find the fact that the notification requirement appears in the same sentence of § 1816(a) as does the assignment-refunding authority to be significant. It is clear that Congress required such notifications so that the VA could consider them in determining whether to enter into particular loan assignments. If Congress had thought the VA could simply ignore the provisions of § 1816(a), as the majority suggests, it would hardly have bothered to require all lenders to send the foreclosure notices in every case. Put affirmatively, since Congress required this information to be conveyed to the VA in all cases, it must at least have intended the VA to consider whether to assign and refund veteran’s obligations in some cases.
For its contrary conclusion, the majority quotes language in H.R.Rep. No. 926, 79th Cong., 1st Sess. 4 (1945). The majority relies on an emphasized clause of the quoted language for the proposition that Congress may not have intended that section 1816(a) be used for the purpose of refinancing a veteran’s loan. The majority errs in relying on the emphasized clause. The clause is taken verbatim from an amendment first proposed in the House bill, but subsequently removed from the bill by the Conference Committee. See 59 Stat. 623, 630 (1945). The language relied on by the majority is therefore entirely unpersuasive if not irrelevant on the question whether Congress intended that the VA exercise the section 1816(a) authority granted it by the Act.
. It is clear that the VA and the majority are referring to the decision whether to employ the option in a particular case, and not the decision whether to recognize the assignment-refunding option at all. Shortly after it quotes the VA’s contention, the majority says “Neither the statute nor the formal regulations published pursuant to 5 U.S.C. § 553 provide any legal standards by which a decision to assign and refund could be reviewed ...” Ante at 699 (emphasis added). Similarly in describing the discretion given to the VA, the majority says
The decision to accept an assignment of a veteran’s loan necessarily involves a consideration of myriad factors, including, but not limited to, internal VA management considerations relating to budget and personnel, the risk of loss to the VA, the adequacy of prior loan servicing, and the circumstances of the borrower’s default. The application of these factors, as well as the determination of other relevant factors and the weight to be attributed to each, has been entrusted to the unfettered discretion of the VA. Even if legal standards for review could be divined, it is clear that, absent allegations that the agency has improperly considered factors outside those entrusted to its discretion, the decision whether to assign and refund raises issues not well-suited for determination by the courts.
Ante at 700.
Thus both the majority and the VA recognize that Congress afforded the VA the discretion to make specific decisions and that it is the actual exercise of this discretion which is not subject to judicial review.
. To reach the conclusion 1 reach here, it is not necessary to decide the question whether the VA could make a deliberate reasoned decision not to implement the assignment-refunding program, although I believe it could not. Nor need we decide whether the VA could suspend implementation of the program for a particular period if it concluded that it had valid reasons for doing so. In this case the record reveals no decision of any kind by the VA, and certainly no decision by the VA to refuse to utilize the assignment-refunding program. Thus, in view of the district court’s finding, I can only conclude that the VA simply ignored the law.