Short Sale Late Req’d/VA

 

Veterans Administration (VA)

Documentation found to determine if late payments required by VA directly. However, lenders and servicers may have additional overlays that apply.

For VA loan: [1]If the borrower is unable to sell the property for an amount that is greater than or equal to what he/she owes on the loan, including closing costs, VA may pay a “compromise claim” for the difference in order to allow the private sale to go through. The borrower can sell the property to a buyer who gets his/her own financing or to a buyer who wants to assume the loan. However, with a compromise assumption, the lender does have to agree to have the amount of its guaranty reduced by the amount of the claim payment.

Per VA, the understanding is that a homeowner should stay current throghout the shortsale, per the note on the property. To stay current is preferable. Veterans and Service members can call VA toll-free at (877) 827-3702 to speak with a VA specialist concerning foreclosure avoidance. Also, 1-800-933-5499. 

[2]Per FHFA: If veteran has conventional Fannie Mae/Freddie Mac loan, offer special treatment for military personnel with Permanent Change of Station (PCS) orders: Service members who are being relocated will be automatically eligible for short sales, even if they are current on their existing mortgages, and will be under no obligation to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes.

[1] Dept. of Veterans Affairs Compromise Sale Program http://www.benefits.va.gov/roanoke/RLC/forms/COMP-SALEProgramTrainingVaBeach.pdf

[2]FHFA Announces New Standard Short Sale Guidelines for Fannie Mae and Freddie Mac/8/21/2012 http://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-New-Standard-Short-Sale-Guidelines-for-Fannie-Mae-and-Freddie-Mac.aspx