VA Loans and the Mortgage Crisis
Most of us know someone that has been affected by the mortgage crisis. VA loans have not escaped the forclosure problem. However, we do find that the percentages of forclosures on VA loans is quite a bit lower than the national average for other types of mortagage loans.
At the end of 2009 VA loans only represent about 2.46% of all foreclosures. This is quite low when compared to Subprime loans at that time which were around 15.8%, FHA at 3.5% and 3.31% for Prime loans. Part of the reason for the lower percentage of foreclosure is the fact that the Veterans' Administration backed loans have certain safeguards in place. The VA also had several other options such as short sales and repayment plans.
The VA strongly recommends that the borrower contact their lender to see what options are available to them. Additionally there is the possibility that the lender will give the borrower more time to cover missed payments.
There are other options for VA loan holders. The Servicemembers Civil Relief Act, or SCRA, will offer lower interest rate to qualified veterans. Veterans that have recently been discharged may be able to put off foreclosure for up to nine months. Another organization at the Veteran's disposal is HOPENOW Alliance. This not-for-profit organization will counsel homeowners that are in default or foreclosure.
Helping Our Veterans to Keep Their Homes Act, also know as HR 4884, is another program designed to aid the VA loan holder. HR 4884 raises the ceiling on the loan amount to $730,000. The act also eliminates the required 10% equity in order to refinance through a VA loan.
The underwriting of VA backed loans contributed to the lower foreclosure rate. Unlike the subprime mortgage companies, VA loans continued to use the older and more stringent guidelines. While subprime lenders would allow mortgages without income and credit documentation, VA underwriting made sure that the borrower could afford the loan.
Homeownership using a VA backed loan is looking brighter. Qualified veterans, Reservists, National Guard members and some surviving spouses will continue to obtain VA backed loans in the future. Regular, and even no down payment VA loans, are available to all qualified individuals.
While the mortgage crisis has not been solved for most, it appears that the Veterans' Administration is there to help its members through counseling and programs designed to encourage homeownership and retention.
More information can be obtained by calling the VA Hotline at 1-877-7MILITARY, 1-877-764-5482 or visit http://www.thevahotline.com
At the end of 2009 VA loans only represent about 2.46% of all foreclosures. This is quite low when compared to Subprime loans at that time which were around 15.8%, FHA at 3.5% and 3.31% for Prime loans. Part of the reason for the lower percentage of foreclosure is the fact that the Veterans' Administration backed loans have certain safeguards in place. The VA also had several other options such as short sales and repayment plans.
The VA strongly recommends that the borrower contact their lender to see what options are available to them. Additionally there is the possibility that the lender will give the borrower more time to cover missed payments.
There are other options for VA loan holders. The Servicemembers Civil Relief Act, or SCRA, will offer lower interest rate to qualified veterans. Veterans that have recently been discharged may be able to put off foreclosure for up to nine months. Another organization at the Veteran's disposal is HOPENOW Alliance. This not-for-profit organization will counsel homeowners that are in default or foreclosure.
Helping Our Veterans to Keep Their Homes Act, also know as HR 4884, is another program designed to aid the VA loan holder. HR 4884 raises the ceiling on the loan amount to $730,000. The act also eliminates the required 10% equity in order to refinance through a VA loan.
The underwriting of VA backed loans contributed to the lower foreclosure rate. Unlike the subprime mortgage companies, VA loans continued to use the older and more stringent guidelines. While subprime lenders would allow mortgages without income and credit documentation, VA underwriting made sure that the borrower could afford the loan.
Homeownership using a VA backed loan is looking brighter. Qualified veterans, Reservists, National Guard members and some surviving spouses will continue to obtain VA backed loans in the future. Regular, and even no down payment VA loans, are available to all qualified individuals.
While the mortgage crisis has not been solved for most, it appears that the Veterans' Administration is there to help its members through counseling and programs designed to encourage homeownership and retention.
More information can be obtained by calling the VA Hotline at 1-877-7MILITARY, 1-877-764-5482 or visit http://www.thevahotline.com