From the letter to the U.S. Department of Veterans Affairs (VA):
The dramatic increase in interest rates since the turn of the year has significantly reduced the effectiveness of VA’s current loan modification program. As a result, an additional loss mitigation option is needed to help veterans who cannot afford to resume their originally scheduled mortgage payments and are in need of payment relief. The refund program gives VA the latitude to adjust the terms of the mortgage without increasing the note rate to the prevailing mortgage rate, which will allow the program to provide the payment relief to these borrowers that VA’s current modification options do not achieve.