VA Home Loan Tips for Veterans

VA Loan no guarantee to buying a home

2009-05-14T13:08:00.000-07:00

Laurie Lopez is exasperated with her family’s home search.

She and her husband John, a 4-year veteran of the United States Navy, are both in their early 30s, have good credit, good jobs and have already been approved for a $225,000 home loan by their mortgage company.

Problem for them is, they’re trying to use a VA Loan to purchase the family’s first home.

“We’ve probably looked at over 100 homes,” Lopez said of the family’s five-month search in the Corona. “We lost out on the last property we bid on because we were using a VA Loan,” Lopez said. And they had the highest bid according to Lopez.

“People don’t want to mess with the inspections,” Lopez said of seller’s disinterest in selling to buyers using a VA Loan, “too much red tape.”

Lopez said they decided on a VA Loan because, for starters, John earned the VA benefit as part of his service to the United States and was honorably discharged. The VA loan is available to veterans, active duty service members and reservists.

The Lopez’s also liked the idea that there was no down payment required – although they have money for a down payment – and there’s no private mortgage insurance, which they would incur unless they put 20 percent down when purchasing a new home with a conventional mortgage.

They’ve also been approved for an FHA loan, however an FHA loan requires a 3.5 percent down payment as well as monthly mortgage insurance – both of which are not required with a VA loan.

Bryant Lacey, who works in the loan administration department at the VA Regional Loan Center in Phoenix, which includes California in its jurisdiction for regulating VA Loans, admits he’s heard complaints that the VA Loan involves too much “red tape” and that it’s too bureaucratic, but he said those critiques are outdated.

Lacey said the problem with sellers is a lack of information about the VA Loan product.

“Realtors and lenders don’t know the guidelines,” Lacey said.

Over the past 18 months, Lacey said the VA has converted to an electronic reporting system that is accessed by loan servicers, which, in theory, are supposed to help expedite the loan process.

“We’ve tried to streamline the process,” Lacey said.

But Richard Gregg, a real estate agent and loan officer in Corona, said he’s not so sure. He points to a borrower that his company, Oreoit LLC, was working on a VA loan with that finally closed last week – after they started the process in February.

“It usually takes 30-40 days,” Gregg said of closing a deal without using a VA loan.

Gregg said he doesn’t have anything against the VA loan, and he’s seen a few working as a seller’s agent, but has never been through the process himself working as a buyer’s agent. However, from his ten years of experience in real estate and working with others at his company who have dealt with the VA loan, a seller accepting a VA loan comes down to preference.

“They can be very cumbersome,” he said of the loan, “and with a VA appraisal, if repairs are necessary, the seller has to ask themselves, ‘Do I want to put any more money into this property?’”

And in a case like the Lopez’s, where they put down a higher bid on the home they wanted, Gregg said the seller probably received either a cash offer or a conventional loan offer, meaning they wouldn’t have to go through a VA appraisal and they could close the deal on the house faster.

“Without knowing the property, the sellers were probably done putting money into the property,” Gregg said. “Bringing a house to VA or FHA standards can be frustrating.”

In Northern California, the VA loan still has its quirks, but it appears they’re getting a bit more traction than they are in Corona.

In San Leandro, 20 miles southeast of San Francisco, real estate agent Shokoofeh Nowbakht has also been working with a client since February on closing a VA loan. While Nowbakht confirms that it’s taken “a little longer” than she’s used to, she’s glad to be helping a veteran become a homeowner.

“We’ve run into a couple things along the way, but it’s been a team effort the whole time in getting this loan to close,” Nowbakht said, referring to the seller, in this case a bank, plunking down $25,000 in repairs to fix termite damage and the house’s foundation. “You don’t see that very often,” she said of the bank paying to fix the repairs.

Nowbakht said she expects to see the loan close next week, even though she’s had to extend the closing date twice in light of repairs needed to the older 2 bedroom home in San Leandro that went for $250,000, a very low price for a home that size in the Bay area. Now she’s waiting on the appraiser to come back and give a thumbs up to the re-painting of the fence, which is the final obstacle before closing.

“I like the VA loan,” Nowbakht admits, “but I would like to see the VA lighten their guidelines. I know they’re protecting the buyer, and I have no problem with that, but sometimes you run into problems where a repair is needed and it’s uncertain who is supposed to pay for it.”

In Nowbakht’s situation, both she and her client have had to pay for repairs out of pocket on a house that technically isn’t the buyer’s yet, and that can be a problem if the loan doesn’t go through. While that doesn’t appear to be the case this time for Nowbakht, she said that this experience with a VA loan – her first – will better prepare her for the next VA loan.

“I’ll have to be more selective with the houses I show to someone using a VA loan,” she said. “I hope it doesn’t get impossible for people to use a VA loan around here.”

The VA loan limits for San Francisco and San Mateo counties is $1,094,625. The VA loan limit for Riverside County, where Corona is located, is $417,000, the standard VA loan limit.

Brian LeBars, a mortgage broker in Pleasanton, just southeast of Oakland, has been doing business in the Bay area since 2001. He said he’s seeing more VA loans in the last year as more and more veterans are returning to the area.

“The business is shifting back towards government-backed loans,” LeBars said, adding he originates both VA and FHA loans.

LeBars said the VA loan is a good product, although it may not be the best product for everyone. In terms of seeing VA loans getting turned away, he said it can happen but that it really depends on what the lender or seller is looking for.

“It could be a poorly-written pre-approval letter, the buyer may have a low (credit) score, the agent might not be used to VA, it could be a number of things,” LeBars said as to what can lead a seller passing on a VA loan offer.

As for Laurie Lopez, the family continues their house search and the plan is to be in a home by this summer, but a lot will depend on whether a seller accepts a VA Loan.

“I want to be in a home this year,” Lopez said with a tinge of desperation in her voice. She adds that she and her husband will continue to shop with their VA loan, but if the search drags on, they may consider using an FHA loan. But Lopez is hoping it doesn’t come to that.

“I just wish somebody would show the VA loan some love,” she said.

Bad Home Loan? Get Out by Using the Loan Forensic Audit

2009-01-21T15:30:00.000-08:00

Loan Forensic Audits: How To Legally Get Out Of Your Bad Loan

by John P. Allen, General Manager of the Veterans Today Network

Leverage! Remember that buzz word! You see when Veterans look for a mortgage, whether it be a VA Home Loan, FHA, or conventional, they rely on professional advice and the aid of a mortgage broker or lender. The loan process is complicated and most everyone places their trust in the professional that is guiding them through the process.

Unfortunately, many of these professionals placed thousands and thousands of borrowers in loans that they could not afford or in just down right exotic mortgages, that now have become extinct.

Predatory lending is a buzz word that is floating around the blogosphere right now and for good reason. There are thousands and quite possibly maybe a million plus people that have mortgages where the Truth in Lending Act was violated, thus falling under the predatory lending statue. Many can stop foreclosure if they only knew what to look for and how to defend themselves.

LOAN AUDIT DOCUMENT
This report is a very specialized and imperative in identifying if a borrower is a victim of predatory lending. A professional review is made of all loan documents and a thorough investigation for miscalculations are made to determine if the loan terms are accurate, truthful, and met the requirements of the applicable federal statutes.

The # 1 goal is to determine whether there were violations of federal law. If these violations are found, then the borrower may be eligible for complete relief of the predatory loan. This is known as a loan rescission. Meaning the lender takes back the "predatory loan" and awards or credits back to the borrower all interest made on payments thus far, loan origination fees, all applicable lenders fees, penalties and attorney's fees.

This can be done by means of a Loan modification or a new affordable loan. This allows the borrower to get a new loan with a smaller principle, meaning that the mortgage can be affordable and non-predatory.

FORENSIC LOAN DOCUMENT AUDIT
What is contained in a Forensic Audit?

A complete client interview is made and all applicable parties are interviewed
A complete loan document and disclosure audit using the Truth in Lending Act (TILA) and Real Estate Settlement & Procedures Act (RESPA)
A reverse engineering of your loan terms and Annual Percentage Rate (APR) for possible TILA violations are made
A complete multi page report is made with all violations and findings and a summary that is accepted by the courts

CONSTRUCTIVE FRAUD
Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan. Did the broker or loan officer or anyone working for the broker or loan officer fail to disclose any material facts to the borrower?
FRAUD AND NEGLIGENT MISREPRESENTATION
Were any representations, statements, or comments, written or oral made by the loan officer, broker, notary or anyone else which contradicted the terms of the documents?
NEGLIGENT MISREPRESENTATION
When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation.
BREACH OF CONTRACT
The note and its attachments are a contract. The broker must follow all the terms of the contract such as the way the interest is calculated, and the penalties it assesses. Were there any terms in the contract which the lender failed to follow?

All of these things above can be found by taking the time and effort to do a FORENSIC AUDIT of your loan. With this information, it's like having a loaded gun. It gives you leverage in the negotiations. You don't have to fire, you just have to politely point it as the assailant and ask them nicely to rethink their hard line. In the lending business, most people at the lenders are just employees doing their jobs. It's not a personal thing or some fanatical reason they are not talking to you. No, it's just that are simply doing what makes profits for their employers. The only way to get anywhere with them is to use leverage!

So, the key is to raise the cost of them NOT negotiating with you by getting a Forensic Loan Audit and bringing it to their attention and then start negotiation. It's that simple!

John P Allen is General Manager of the Veterans Today Network. He is an experienced professioanal negotiator and teacher. He has a B.A. in Finance from California State Unversity at Fullerton. He has been counseling Veterans for over 25 years on financial issues and helps Veterans get Loan Modifications. He can be reached via email at gm@veteranstoday.com or by phone at 1(619) 819-9360

VA Home Loans: My Credit Score Stinks, Can we Qualify with Only My Spouse's Credit Score?

2009-01-17T15:49:00.000-08:00

I read your well written article, “Are You Eligible for a VA Home loan?” on the VeteransToday.com website. I appreciate your willingness to share your expertise. That is very magnanimous of you! I am impressed that you are willing to take questions. I understand you would be providing me general answers, just based on yet not specific to my situation and your answer can not be construed as a binding approval/denial!

I am a newlywed of less than 30 days. My husband is retired US Military. His credit is very good. The last time we checked it, it was in the high 700’s.

My credit? Urgh! A divorce with disputed liabilities, a lay-off and a collapse of a self-owned business due to financing partner withdrawal for their personal reasons, I am left with a credit in shambles.

I am mortified to say my score is in the low 500’s.

We want to purchase a home. The builder is insisting the VA requires me to apply for the loan as a co-buyer/owner. I have nothing to bring to the table but a bad credit score. I say there has to be an alternative. I mean what happens if a person got a loan and then got married to a bad debt person? Seems unfair to those who are married already.

Do I have to be on the loan or is this an uninformed agent?
If I have to be on the loan how do you suspect my odious situation will affect our approval/amounts?
If I have to be on the initial loan approval is there any way to separate myself from it later like a quitclaim or a rescission?

My husband has worked really hard to earn his good credit rating. I am doing what I can not to impact it negatively. I would hate to interfere with his dream of owning a home again! We know he could go conventional but he earned the right to the VA loan he should reap the benefits.
What do you advise.

ANSWER: Lenders base your collective qualification on the lowest credit score.
So if you want to buy we would have to do it using your spouse info alone!
In other words, we could only utilize his credit score, income and debts for qualification.

You could be on title but NOT the loan.

More and more it is seems like the lenders are raising the minimum score even higher.
I think within the month all major lenders will be requiring a minimum 600 score.

When ready, have your husband fill out our PRE-QUALIFICATION FORM with only his info.

Having Trouble Paying Your Mortgage? Loan Modification can be the solution

2009-01-15T01:35:00.000-08:00

Veterans with Hardships Get Help on their Home Loans with Loan Modification

by Jerred Bulstrom, USMC (Ret.)

Recently, in the media, you may have heard the phrase "Loan Modification" and it sounded intriguing. But what is it and can it benefit you and your family.

Loan Modification is arguably the most effective tool you can use if you are behind on your mortgage and in midst of a financial hardship to save your home from entering foreclosure. With a loan modification, the mortgage loan is restructured so that it is affordable and can fit comfortably into your budget rather than being an overwhelming monthly drain on already tight finances.

Loan modification agreements come in different forms but quite frequently they involve the reduction of mortgage's interest rate for a specified period of time so the homeowner can continue to make payments and stay in the home. Loans can also be modified so they have a longer amortization term (e.g. 40 year instead of 30 year) which will cause the payments to decrease.

In addition, Principal write downs can be obtained and are more common now, especially in this very rough market. The lenders are now willing write off some of your principal to keep you in the home. Why? Because, it's stil less expensive for them to work with you than to take back the home and if writing off some of the principal will make it work, then they do it.

But what is the lenders incentive to work with you? Why do the banks want to renegotiate with you? What leverage do you have?

Well, that's a great question. The short answer is that they will NOT negotiate with you until you have real leverage. Not the bluffing kind that you hear about but real genuine leverage that forces them to the table to renegotiate.

In most cases, the real leverage is that you have a true hardship that is causing you to be unable to meet the original terms of the loand agreement and its' forcing your hand. In addition, professional forensic audits can also bring you leverage. Audits find errors and omissions or even, and now more common, fraud committed by one one or more of the vendors who were involved in the origination of the loan causing the loan to be placed in "hey this needs to go to court" status which is a the worst thing a lender wants to hear. Why? If a lender truly believes that a fraud may have been committed, they know that they will lose massive amounts of money and lost revenue while you get to stop making payments and stay in the house while the court drags on for months and months - many cases years. In other words, its costly to them and that gives you even more leverage to say "hey, let's talk about this".

The point of this article is that loan modification is a real tool for you to use to put yourself back in the game. And it could be for you.

For U.S. Veterans, the type of loan you have, whether it be a current VA Home Loan, FHA, Conventional or other, will define your best strategy on how to structure your game plan and making it happen.

So if you love your home and know you can afford it, but the current mortgage is threatening a loss of both home and good credit, contact me and I will listen and then counsel on what is the best strategy for you to get it going now!

Working with lenders can be a real pain, I know. But their is help out there for you now.

Click to learn more about Loan Modification

ABOUT THE AUTHOR: Jerred Bulstrom is a loan modification specialist with the Veterans Today Network and VA Home Loans Today. He served in both the U.S. Amry and United States Marine Corp based at Camp Pendleton serving combat duty in Iraq. He can be reached via email at jerred@veteranstoday.com or by phone at 1 (619) 819-9360

Loan Modification - Frequently Asked Questions

2009-01-07T17:43:00.001-08:00

A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.

APPLY NOW!

Question 1: In utilizing the Loan Modification option to bring an asset current, can the mortgagee include all fees and corporate advances?

Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually completed and applicable to the current default episode may be capitalized into the modified principal balance.

Question 2: May a mortgagee perform an interior inspection of the property if they have concerns about property condition?

Answer: Yes, the mortgagee may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the mortgagor's continued ability to support the modified mortgage payment.

Question 3: Can a mortgagee include late charges in the Loan Modification?

Answer: Mortgagee Letter 2008-21 states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.

Question 4: When utilizing a Loan Modification option, can a mortgagee capitalize an escrow advance for Homeowner's Association fees?

Answer: HUD Handbook 4330.1 REV-5, Paragraph 2-1, Section B, Escrow Obligations states: Mortgagees must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage.

Question 5: Is there a new basis interest rate which mortgagees may assess when completing a Loan Modification?

Answer: Yes, Mortgagee Letter 2008-21 states that the new basis interest rate is 200 points above the monthly average yield on U.S. Treasury Securities, adjusted to a constant maturity of 10 years.

Question 6: Will HUD subordinate a Partial Claim, should a mortgagor subsequently default and qualify for a Loan Modification?

Answer: If a mortgagor subsequently defaults and qualifies for a Loan Modification, HUD will subordinate the Partial Claim.

Question 7: Are mortgagees required to perform an escrow analysis when completing a Loan Modification?

Answer: Yes, mortgagees are to perform a retroactive escrow analysis at the time the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.

Question 8: Is the mortgagor eligible for the upfront premium refund at payoff of a modified loan?

Answer: It depends upon when the closing date occurred. For assets closed:

After July 1, 1991 but before January 1, 2001, the 7-year unearned premium refund schedule shown in Mortgagee Letter 1994-1 remains in effect, on or after January 1, 2001 that are subsequently refinanced, the 5-year refund schedule shown in the attachment of Mortgagee Letter 2000-46 applies, or on or after December 8, 2004, refunds of upfront MIP are eliminated except, when the mortgagor refinances to another FHA insured mortgage. The refund schedule attached to Mortgagee Letter 2005-03 has been modified to a 3-year period.

Question 9: Can a mortgagee qualify an asset for the Loan Modification option when the mortgagor is unemployed, the spouse is employed, but the spouse name is not on the mortgage?

Answer: Based upon this scenario, the mortgagee should conduct a financial review of the household income and expenses to determine if surplus income is sufficient to meet the new modified mortgage payment, but insufficient to pay back the arrearage. Once this process has been completed the mortgagee should then consult with their legal counsel to determine if the asset is eligible for a Loan Modification since the spouse is not on the original mortgage.

How do I obtain information regarding rules and regulations that govern VA loan under writers?

2008-12-30T17:10:00.001-08:00

Also information on appeals, disputes and complaint claim forms.

Good questions, well, I would call the regional VA office for your area. Lenders have a lot of leeway when it comes to interpreting VA guidelines they can also put overlay over the rules. For example VA itself does not have credit score requirements but all the investors do so in order to sell a VA loan on the secondary market additional restrictions are put in place.

I guess my big question to you is why did they deny you a loan?

Depending on that reason it may just come down to repackaging it in a more positive light.

Visit www.EquityVALoan.com for more info.

2009 VA County Loan Limits for High-Cost Counties

2008-12-28T09:36:00.000-08:00

The Department of Veterans Affairs’ Loan Guaranty program does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan. However, the following county “limits” must be used to calculate VA’s maximum guaranty amount for a particular county. These limits apply to all loans closed January 1, 2009 through December 31, 2009. 2010 county loan limits will be made available as soon as possible.

The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2009 VA Limit shown below. Therefore, a veteran with full entitlement available may borrow up to the 2009 VA Limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran must be reduced accordingly. Lenders should check their own investor requirements regarding guaranty amounts and down payments. Questions about VA loans in a particular county may be directed to the VA Regional Loan Center (RLC) listed for that county.

Click here for 2009 Loan Limits

VA Home Mortgage Rates at Lowest Level Since January

2008-12-09T09:46:00.000-08:00

VA Home Loan Mortgage rates at lowest level since January

Average now 5.49 percent — and further cuts could be on the way

by Ezell Johnson

WASHINGTON - Rates on 30-year VA Home Mortgages plunged this week to the lowest level since January after the government launched a sweeping new effort to aid the U.S. housing market.

Average rates on 30-year fixed-rate mortgages dropped to 5.49 percent in the largest one-week drop in 27 years. That was down from 5.97 percent last week, and the lowest since the week of Jan. 24, when it was at 5.48 percent.

Further drops could be on the way if the government launches an industry-backed plan to lower the rate on a 30-year mortgage to 4.5 percent by spending hundreds of billions to buy mortgage-backed securities.

That would follow an effort announced last week by the Federal Reserve, which is planning to purchase up to $600 billion of mortgage-backed securities and other debt issued by Fannie and Freddie and the Federal Home Loan Banks. Those institutions don’t make loans directly to consumers, but provide money to the mortgage market by packaging loans into investments.

The Fed’s move caused rates to immediately drop by about a half-point, and many in the real estate industry hope rates will keep dropping as the government increases efforts to battle the credit crisis.

Rates “are now almost a full percentage point lower since the last week in October,” Freddie Mac Chief Economist Frank Nothaft said in a statement.

Bringing mortgage rates down is positive, but it “doesn’t help people that currently have unaffordable mortgages because it doesn’t help them refinance,” Sheila Bair, chairman of the Federal Deposit Insurance Corp., said Thursday. “Low interest rates help some consumers, but the ones that really need help and can’t refinance are not helped.”

"The VA Interest Rate Market is also following the downward path of FHA and Conventional Loan financing" says John P. Allen, VA Loan Specialist at Equity VA Loan. "If this continues, these times will see the lowest rates ever in my lifetime."

Meanwhile, Federal Reserve Chairman Ben Bernanke said the government can take steps to improve the functioning of the mortgage market, which would allow more people to secure home loans and help stabilize the housing market. Currently, he said, “the mortgage market is dysfunctional.”

Mortgage rates are sinking as Treasury yields, some of the most sensitive barometers of investor sentiment, have dropped to record lows this week as a torrent of bad economic news continues. But as investors send yields down, they’re also influencing the economy — driving interest rates so low that savers get punished and borrowers get a break.

Treasury buying has picked up and sent yields down because the economy is in a recession that investors believe will be long and deep.

Consumers already are taking advantage of the situation. New mortgage applications more than doubled last week, according to the Mortgage Bankers Association’s weekly survey released Wednesday. Refinance volume more than tripled, and made up nearly 70 percent of all applications.

Rates on other types of mortgages also fell, according to Freddie Mac’s survey. For 15-year, fixed-rate mortgages, rates averaged 5.33 percent, down from 5.74 percent last week.

Rates on five-year, adjustable-rate mortgages dipped to 5.77 percent, compared with 5.86 percent last week. Rates on one-year, adjustable-rate mortgages dropped to 5.02 percent, from 5.18 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point last week. The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.5 point.

A year ago, the nationwide average rate on 30-year mortgages stood at 5.96 percent, 15-year mortgage rates averaged 5.65 percent, five-year adjustable-rate mortgages were at 5.75 percent, and one-year adjustable-rate mortgages stood at 5.46 percent.

The rate on Fannie Mae 30-year mortgage-backed securities fell to about 4.25 percent Thursday, said Kevin Giddis, managing director of fixed income at Morgan Keegan. That is down from about 5.5 percent in mid-November.

Fears of a protracted recession are slamming Treasury yield, which is good for borrowers with mortgage rates tied to Treasurys, but bad for people invested in money market funds that have been buying up Treasurys for safety.

In the final analysis, the VA Mortgage Market is outstanding now for new borrowers getting in. Combined with low rates, lower housing prices, and the price of gasoline dropping to what some say could be $ 1 per gallon by summer of 2009, well, looks like we are all in for a turnaround and Veterans will be the beneficiaries.

Builder Certification from Veterans Administration (VA)

2008-12-02T19:11:00.000-08:00

“I am a builder and have forms to get certified by the VA. Where can I send them and how long does it take to get a VA certification #?”

Well, here's the info!

Builder Information

Builders are not approved by VA. They need only to register with VA to obtain a VA Builder ID number. Thus, there is no lengthy processing time and in most cases an ID number can be issued within a day or two.
To obtain a Builder ID number, three items need to be submitted to the Construction and Valuation unit of the local VA Regional Loan Center having jurisdiction over the area in which the builder will construct property. These items are:
- Builder Information and certification: Click here to download required format
- Form 26-421 (Equal Employment Opportunity Certification)
- VA Form 8791 (VA Affirmative Marketing Certification)
Information concerning VA builder ID# requirements can also be found in the VA Lenders Handbook (VA pamphlet 26-7) section 10.07, page 10-14
The list of VA registered builders may be obtained at the following link: http://condopudbuilder.vba.va.gov/2.2/frames.html

ORIGINAL INFORMATION: http://www.homeloans.va.gov/bildinfo.htm

Short Payoff: Can we get a refinance loan?

2008-11-13T17:12:00.001-08:00

Q. We are upside down with the market value of our home. Our current mortgage Company said that they would accept a short payoff of our mortgage. Both of us are self-employed.

A. You can get up to 90% Loan to current Market Value (LTV) if your current lender is willing to take that 10% off the current market value and subtract the closing costs. You would still have to qualify from a credit and Debt to Income perspective

3 Major Changes to VA Home Loan Guaranty Program

2008-10-21T18:57:00.000-07:00

On October 10, 2008, the President signed S. 3023, the Veterans' Benefits Improvement Act of 2008. Following are the three major impacts to the VA Home Loan Guaranty Program:

1. Authority to guarantee adjustable rate mortgages (ARMs) and hybrid adjustable rate mortgages (HARMs) has been extended through September 30, 2012.

2. The maximum guaranty for cash-out refinance loans has been made the same as purchase loans - they are no longer limited to $36,000. In addition, cash-out refinance loans may now be made up to 100% of the appraised value of the home.

3. The temporary increase to the maximum guaranty has been extended through December 31, 2011. When combined with new locality-based Freddie Mac conforming loan limit in January 2009, VA's maximum county “loan limit” will be $1,094,625 ($1,641,937.50 in Alaska, Guam, Hawaii, and the Virgin Islands). This results in unique county "loan limits" for VA.

This notice is meant to provide general information regarding the major impacts of the recently passed legislation. Click on this link for more detailed information and guidance.

Protection from VA Home Loan Foreclosure

2008-10-13T11:46:00.001-07:00

QUESTION: I am an active duty member that was forced to change assignments and now have a VA loan that has the possibility to go to foreclosure. I am currently trying to get a short sale through. I need to know what kind of protection I have as far as the taxes after it forecloses and all the other sneaky things that the VA can protect me from.

ANSWER: You need to contact your loan service company. Try to work out payment arrangements or try to rent it out. If you have a buyer then definitely talk to them about a short sale. I have not heard of VA protecting the Veteran from owing taxes on the short fall but with all this bail out stuff who knows what will happen. Usually all bets are off once a house is foreclosed on.

Can a Non-Veteran Get a Vendee Loan from the VA?

2008-10-13T08:02:00.001-07:00

The VA Vendee Loan program is for properties that have gone into foreclosure, and are actually loans given by the Veteran's Admin. The administration still has to approve the loan based on the usual criteria such as credit history, income, and debt. Anyone can apply for these loans, whether military or civilian. There is a down payment requirement with vendee financing. You can get more info about these loans at http://www.ocwen.com website, which is the service provider for VA foreclosures.

Can I Add Repair Costs to VA Home Loan?

2008-10-06T10:55:00.001-07:00

I want to take a VA Loan and purchase a home that also needs repair.

Can I take add repair costs to a loan to take care of fixing up the home as well?”

No, not on a VA loan. VA will allow energy efficient repairs/upgrades up to $6000.00 or handicap modifications but that is about it.

is Child Support Considered Debt for VA Loan qualification?

2008-09-23T11:29:00.001-07:00

How are child support obligations considered in qualifying for a VA loan? Is it considered debt?

Yes, it is considered DEBT!

Co-Signer on a VA Home Loan?

2008-09-23T11:27:00.001-07:00

I would like to know if I can have a co-signer on a VA mortgage loan. This person is eligible for a VA loan, as am I. However they would not be living in the property. They would just be a co-signer. This person is actually my mother and she would be co-signing to help.

No VA does not allow it but FHA does.

VA to Halt Adjustable Rate Mortgages

2008-09-10T05:51:00.001-07:00

Unless Congress extends the Department of Veterans Affairs' (VA) authority to guarantee adjustable rate mortgages (ARMs) and hybrid adjustable rate mortgages (HARMs), these loan types will expire on Sept. 30, 2008. Lenders have been told to not accept applications for VA-guaranteed ARMs and HARMs after Sept. 30, 2008. ARM or HARM applications dated Sept. 30, 2008 or earlier may be processed so long as the loan closes within a reasonable time and satisfies all other VA program requirements. This will effectively end veterans' access to VA-guaranteed adjustable rate mortgages and will limit them to fixed rate mortgages. Fixed rate mortgages offer greater stability for the borrower, but normally carry a higher interest rate.

VA Raising Home Loan Ceilings in Many Areas up to $ 729,000

2008-08-21T09:25:00.001-07:00

VA Raising Home Loan Ceilings in Many Areas up to $ 729,000

Improved Benefits Aid Disabled Veterans in Adapting Homes

WASHINGTON – The Department of Veterans Affairs (VA) will use a locality-based approach in raising ceilings on its no-downpayment home loans from the current $417,000 to as much as $729,000.

The increases are effective immediately under legislation recently enacted with President Bush signing the Housing and Economic Recovery Act of 2008.

That law also improved VA's Specially Adapted Housing Program. It raises primary grants from $50,000 to $60,000 toward constructing a new home or modifying an existing home to meet adaptive needs of veterans or active duty servicemembers with certain service-connected disabilities.

One new feature is a provision in the law that will assist burn victims. It will allow veterans with certain service-connected disabilities resulting from severe burns to receive the adaptive housing grants. The new law also makes future increases in ceilings on the Specially Adapted Housing Program automatic.

The increased limits in the general home loan program for all veterans' home purchases or construction will be based on local housing costs, tied to the similar locality adjustments of the Federal Home Loan Mortgage Corp., Freddie Mac.

VA home loans are available for veterans to purchase or construct single-family homes, and to purchase condominiums or cooperative apartments. There are about 2.3 million existing VA home loans, more than 90 percent made with no down payment.

More information about VA home loans and adaptive grants is available from VA go to http://www.DirectVALoan.com

Financing Modular Home with VA Home Loan

2008-07-24T09:06:00.001-07:00

Question: I want to know if I can finance a modular home built on a steel frame

Answer: Yes, so long as it is already built. VA will not do construction loans

Does VA Provide for Reverse Mortgages?

2008-07-18T12:22:00.001-07:00

NO, There is NO "VA reverse mortgage".
There is a an FHA program and there is a FNMAE one too.
They are pretty much the same you can either get a monthly payout or a lump
sum payout. You pretty much have to owe very little or nothing on the home
and live in it as your primary residence.

Are You Disabled and Looking for Relief in making payments to Lender on VA Home Loan?

2008-07-17T10:05:00.001-07:00

by Bill Russberg

Well, I received this question today “I am recently disabled and looking for relief in making payments to my lender on VA Home Loan. Is there a program for this?”

NO, there is no program. Now, If you have a VA loan and paid a funding fee, then maybe the VA / Lender would reduce the loan amount by that if VA awards you the VA disability

But that’s about it. There is NO payment relief program that I am aware by VA for recently disabled veterans.

Where are the daily VA Home Loan Rates Posted?

2008-07-08T18:49:00.001-07:00

There is no place that I am aware of that publishes current daily rates for
VA Loan.
www.BankRate.com posts an average of mortgage rates for the day for 30 year
rates.
Typically, VA rates run about .25% less than this published rate...but each
lender differs slightly depending on where and how they buy their monies on
the market.
So it's not a perfect world right?
I agree!
Maybe we need a fixed published rate for all lenders so that we can take the
guessing game out of this darn thing and remove the scam programs from scam
brokers too. I mean that's what Congress should be doing about this mortgage
mess right?
Yet, I can understand that we need leave competition in the marketplace too
so that rates remain low. Hum?
Anyway, rates are really low compared to what we had back in the early 80s
and even the 90s.....I mean, sometimes we in America take our money market
efficiencies for granted and forget how good we have it. I mean do you know
what consumers in Mexico, our neighbor, pay for their mortgage monies? Try
double digits....yeah, in the 15% range! Talk about inefficiency causing
consumer harm.....they have it bad there. We are fine here in the 6.25%
fixed for 30 year range....thank goodness we live in great country...we just
have to a better job and fix the loopholes that invite a few who try to take
it for granted and abuse it.

New Veterans Program: Energy Efficient Mortgage (EEM)

2008-07-07T15:12:00.000-07:00

The Energy Efficient Mortgage (EEM) program allows borrowers to upgrade the energy efficiency of the subject property and to finance the cost of the upgrades. The borrower may do this at the time of purchase or as a refinance if the borrower already owns the subject property.

Watch EEM PowerPoint Presentation

Eligible Property

The property must be an existing dwelling that is either being purchased or refinanced by the veteran. For IRRRLs, the veteran may certify prior occupancy as current occupancy is not required.

Eligible Improvements

Acceptable energy efficient improvements include, but are not limited to, the following items: solar heating systems, including solar systems for heating water for domestic use, solar heating and cooling systems, caulking and weather-stripping, furnace efficiency modifications limited to replacement burners, boilers or furnaces designed to reduce the firing rate or to achieve a reduction in the amount of fuel consumed as a result of increased combustion efficiency, devices for modifying flue openings which will increase the efficiency of the heating system, and electrical or mechanical furnace ignition systems which replace standing gas pilot lights, clock thermostats, new or additional ceiling, attic, wall and floor insulation, water heater insulation, storm windows and/or doors, including thermal windows and/or doors, heat pumps, and vapor barriers.

Maximum Allowable Cost of Improvements

The mortgage loan amount may be increased as follows: up to $3000 based solely on documented costs for energy efficiency improvements, up to $6000 provided the increase in the monthly mortgage payment does not exceed the likely reduction in monthly utility costs, more than $6000 subject to a value determination by VA, or up to the amount necessary to pay for materials, if labor is performed by the veteran.

Maximum Mortgage

Adding Cost of Improvements

The cost of the improvements may be added to the loan amount, up to $6000.

The appraised value may be exceeded by the amount of the energy efficient improvements on purchases and IRRRLs.

For a regular refinance loan, the loan cannot exceed 90% of the reasonable value shown on the appraisal (NOV) plus the cost of the energy efficient improvements (value x .90 + cost of improvements).

Funding Fee Calculation

The funding fee is calculated on the full loan amount, including the cost of the energy efficient improvements.

Underwriting Issues

General

In addition to the underwriting issues listed below, the lender must determine the following:

(1) If the proposed weatherization and/or energy conservation improvements are reasonable for the particular property, and (2)

If the veteran’s ability to pay the increased loan payments caused by the addition of the improvements is satisfactory.

Increased Payments for Costs up to $3000

The lender must determine that the proposed energy efficient improvements up to $3000 meet the following requirements: normally offset by a reduction in utility costs, and based solely on the documented costs Increased Payments for Costs Between $3000 and $6,000

For energy efficient improvements that are more than $3000 but no more than $6,000, the lender must determine if the increase in the monthly mortgage payment does not exceed the likely reduction in monthly utility costs.

The lender is expected to rely on locally available information provided by utility companies, municipalities, State agencies, or other reliable sources to make the determination.

VA will accept the lender’s determination that the requirement is met.

Increased Payments for Costs Above $6000

The lender should carefully exercise discretion and consider the following points whenever the energy efficient improvements exceed $6,000: whether the increase in monthly mortgage payments exceed the likely reduction in monthly utility costs, whether the veteran’s income is sufficient to cover the higher mortgage payment, and documentation of VA’s valuation of the energy efficient improvements.

A VA Certificate of Commitment, on a prior approval loan, issued prior to the decision to make energy efficient improvements over $6,000 must be returned to VA for a determination that the applicant still qualifies.

Increased Payments on an IRRRL

If the monthly payment (PITI) for the new loan, when adding the cost of energy efficient improvements, exceeds the PITI of the loan being refinanced by 20% or more, the veteran must qualify with the higher payment.

Regular Cash-Out Refinance Transactions

VA guidelines allow the cost of any energy efficient items to be included in the maximum loan calculation. However, DU does not capture the cost of energy efficient items; therefore you may need to perform the maximum loan calculation outside of DU.

Veteran’s Entitlement

VA will guarantee an energy efficient mortgage in the same proportion as a loan not including energy efficient improvements. However, the charge to the veteran’s entitlement will be based on the loan amount before adding the cost of energy efficient improvements.

Reference: See the VA Lender’s Handbook (Section 7.03) for specific instructions on calculating the guarantee and entitlement for EEM loans.

Closing and Post Closing - Escrow for Improvements

General

Energy efficient improvements should be completed when the loan is reported to VA. However, if the improvements cannot be completed prior to submitting the loan report to VA, the loan may be closed by establishing an escrow to assure completion.

A formal escrow is not required for loans processed on a prior approval or automatic basis. Only the amount necessary to complete the improvements needs to be withheld and no additional documentation pertaining to the escrow funds needs to be submitted to VA.

Generally, the improvements must be completed within 6 months from the date of loan closing. At that time, VA will expect the lender’s notification of completion or notification that funds were applied to reduce the loan balance.

When the improvements have been completed, the lender must provide VA with a written notification of completion and that all escrow funds have been disbursed. The lender is responsible for verifying that all costs have been paid.

If, after a reasonable period, the lender determines that the improvements will not be completed, the balance of the escrow funds should be applied as principal to reduce the loan balance and the Regional VA office must be notified.

Special Instructions for EEMS on IRRRL Transactions

VA allows a veteran to receive up to $6,000 of IRRRL loan proceeds as reimbursement for the cost of energy efficiency improvements completed within the 90 days immediately preceding the date of the loan.

If the energy efficiency improvements are not completed prior to closing, the funds may be escrowed as mentioned in the “General” section above.

Escrowed funds must be paid directly to the contractor(s) once the lender is satisfied that the work is properly completed. Escrowed funds may not be given to the veteran as reimbursement or payment.

FHA's Energy Efficient Mortgage (EEM) Program

2008-07-07T14:54:00.001-07:00

Did you know that the federal government can help you make energy improvements to your home? If you've considered remodeling, take the time to learn more about the FHA's Energy Efficient Mortgage (EEM) Program. You might qualify for a higher loan amount to fund energy improvements that will lower your living expenses.

If your cost of living is being hit hard by rising gasoline prices, you're not alone. Everyone's feeling the squeeze. One way to reduce your spending is to cut the cost of your utility bills. And replacing those drafty windows and leaky ducts might be easier than you think.

Energy Efficient Mortgage (EEM)

An EEM funds the costs of planned energy-efficiency improvements to your home. They can be federally insured through the Federal Housing Authority (FHA) or Veteran's Administration (VA). They may also be made without federal backing, either through conventional channels, or through an Environmental Protection Agency (EPA) program called ENERGY STAR. Each of these channels has slightly different terms and qualification requirements.

Qualified energy upgrades

Common upgrades include ductwork and insulation repairs, and installation of modernized heating and air conditioning systems, energy-efficient windows, and/or energy-efficient water heaters.

All EEM programs require that the financed energy upgrades result in utility cost savings over time. The potential savings must be documented by a Home Energy Rating Systems (HERS) report. A HERS report rates your home's energy efficiency before any upgrades, and then prepares a cost/benefit analysis on potential upgrades. Qualifying upgrades are those whose estimated costs of implementation are less than the resulting savings. Upgrades costing more than the total savings they can provide are not recommended.

Benefits of EEMs

Because EEM lenders allow additional funding for the cost of the energy upgrades, you'll qualify for a larger loan amount. Your lender may recognize that your cost of living will be lower after the planned upgrades, which should also increase your borrowing power. If you qualify for an FHA- or VA-backed EEM, you'll likely have access to better rates and terms. Lastly, the EEM will give you the resources necessary to increase the value of your home and enhance your quality of life.

Taking action

The steps to acquiring an EEM refinance are very similar to applying for a conventional loan. Start by shopping around, letting prospective lenders know that you're considering an EEM. An experienced lender can offer advice as to which program would be most appropriate for your situation. You'll also need to order a HERS report as soon as possible; this will indicate which upgrades qualify for financing.

The sooner you get the ball rolling, the sooner you'll realize the benefits. Who knows…you may actually catch the energy-efficient bug and trade in that gas-guzzler for a hybrid.

VA Foreclosed Homes Available to All Now!

2008-06-26T08:54:00.000-07:00

BUY VA FORECLOSED HOMES NOW

VENDEE FINANCING PROVIDES PATH FOR MANY WITH CREDIT CHALLENGES

by John P. Allen

If you're thinking about buying a VA-owned property, Vendee Financing may be an option for you. Unlike VA Loans, which are guaranteed by the Department of Veterans Affairs (VA) and only granted to U.S. Veterans and their spouses, VA Vendee Financing is available to Veterans and non-Veterans alike.

Compared to traditional mortgage loans, Vendee Financing requires fewer fees and less money out of pocket. You'll enjoy the unique benefits of a low - or even no - down payment; no mortgage insurance; no tax service fee; no appraisal fee; and no flood certification fee.

While the fees, terms and requirements are subject to change without notice, at the time of this writing the borrower would pay 2.25% of loan amount to the Department of Veteran Affairs. The Application fee is just $350.00 which is non-refundable fee and made payable to Ocwen Financial Corporation.

Ocwen Financial Corporation handles the majority of VA Home Foreclosures for the lenders who have them on the books. They are a leading business process outsourcing provider to the financial services industry, specializing in loan servicing, mortgage fulfillment and receivables management services. In the USA, Ocwen is headquartered in West Palm Beach, Florida with offices in Arizona, California, Florida, Georgia, Illinois and New York.

Here are the features of getting Vendee Financing through OCWEN:

* 0% Down Payment -- if Owner Occupied
* 5% Down Payment -- if Investment/Non owner occupied
* 20% Down Payment - processing will be streamlined.

Closing Costs
* Funding Fee - 2.25% of loan amount to VA
* Closing Fee To Ocwen Loan Servicing, LLC ($500.00 flat fee)
* Prorated Property Taxes
* Prorated HOA Fees
* Optional Title Policy
* Recording Fees
* State Taxes (if applicable)
* 1 year pre-paid Hazard Insurance
* Title Company Closing Fee
* Title Company Document Preparation Fee
* Attorney Fee
* Seller Representation Fee
* Title Company Express Mail
* Title Company Wire Fee
* Title Company Deed Preparation Fee
* Other Costs may be incurred based upon state and local requirements

Disclosures:

All properties are sold "As Is."
The applicable interest rate for a Vendee Loan will be the rate in effect at the time Ocwen accepts the Offer to Purchase and Contract for Sale of behalf of VA.
Interest Rates and Funding Fees are set by VA and are subject to change without notice.
Returned checks are subject to the Returned Check Fee charged by the bank, plus the amount of the check.
If application is approved and applicant does not close, the Earnest Money Deposit may be forfeited to VA.
Vendee Financing may not be available on all properties.
VA Funding Fee (currently 2.25%) is required to be paid at the time of Closing. Funding Fee is calculated on the total loan amount
* A veteran who is receiving compensation (or who would be entitled to receive compensation, but for the receipt of retirement pay), or a surviving spouse whose spouse died as a result of service-related disability is exempt from the funding fee.

Vendee Loans - Frequently Asked Questions

Q: What is a Vendee Loan?
A: A Vendee Loan is Purchase Money Financing provided by the Department of Veterans Affairs (VA) on the sale of VA Properties.
Q: Who Can Apply for a Vendee Loan?
A: Both Veterans and Non-Veterans can apply. Purchasers can be Owner-Occupants or Investors.
Q: How do I apply for a Vendee Loan?
A: Have either your representative or yourself contact the Listing Agent for detailed instructions on how to submit your loan package. All forms and instructions are located in the Ocwen Vendee Financing Section of this web site.
Q: What are the Benefits of a Vendee Loan?
1. Easy application process
2. Reduced closing time
3. Competitive fixed interest rates
4. Low down payment
5. No mortgage insurance required
6. No tax service fee
7. No appraisal fee
8. No flood certification fee
Q: How do I know if I will qualify for VA Vendee financing?
A: Non Veterans as well as Veterans are eligible to apply for VA Vendee financing. Credit Scores are not used as a determining factor in VA Vendee financing approval.
Q: What are the closing costs associated with VA Vendee financing?
A: Closing costs are state specific. We do not require Title Insurance, Appraisal, Survey, or Private Mortgage Insurance (PMI). See Program Terms and Conditions for further details.
Q: How much Earnest money is required?
A: The minimum is $500.00, except in West Virginia and Virginia where earnest money requirement are different. Please see your local Real Estate Agent for earnest money requirements in your state.
Q: What title company will be used for closing and what is the cost?
A: Title company selection is state specific. In seller selection states, Ocwen chooses title company from a pre-approved list.
Q: Why do I have to pay a funding fee?
A: This fee is charged by the VA. Certain military applicants are exempt from paying this fee. To see a list of exempt military see the Terms and Conditions above.
Q: What is the interest rate for a VA Vendee loan?
A: The interest rate is set by the VA. To see the most current interest rate, see the Terms and Conditions above
Q: Where can I find information on VA Vendee Underwriting?
A: You can view and print Pamphlet 26-7 - “Guaranty or Insurance of Loans to Veterans ... GI Loan Programs” from the VA website. The web address is http://www.warms.vba.va.gov/pam26_7.html.
CONTACT INFORMATION
Official OCWEN Web Site - Forms
Ocwen
Attn: VA Vendee Financing
P.O. Box 785060
Orlando, FL 32878
E-Mail: vendeeinfo@ocwen.com
Phone: 1-866-4VENDEE ((866) 483-6333)
8:30 a.m. - 5:30 p.m. EST