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21 May 10 VA Loans What Need to Know About a VA Mortgage

VA mortgage loans are offered through the Veterans Administration (VA).  The VA provides benefits and health care to the US military, its veterans, and their spouses. Not everyone qualifies for VA financing benefits; rather only people who qualify for VA benefits or services are eligible for a VA mortgage.  VA loans are different from traditional mortgages because the VA itself guarantees a certain percentage of the mortgage should it go into default. However, VA loans are not actually offered by the VA. Rather, they are offered by independent VA lenders and merely insured in part by the VA.

Why are VA home loans so unique? VA loans are the last home financing vehicle that allows 100% financing with no down-payment required.  The VA loan program does not require a minimum credit score, and it allows a qualified borrower to buy a home with no down payment. Further, VA loans require no private mortgage insurance (PMI). PMI is a special type of insurance that most homebuyers have to pay if their home is worth less than 80% of the loan amount. With a VA loan, the traditional borrower lending costs like private mortgage insurance are waived.

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07 Jan 09 Texas Looking to Stop Foreclosure Relief Scams

Most people in the mortgage industry figured there would be some policing arise to prevent the foreclosure scamming that seems to be popping up in this non-regulated field amid the foreclosure crisis.  Paul Jackson said in a recent article that this was bound to happen with the number of troubled homeowners has increased exponentially, so too have the number of profiteers looking to prey on a homeowner’s desire to avoid foreclosure. Foreclosure rescue scams remain a threat in financially depressed areas in Ohio and Michigan — are now among the fastest-growing areas of problems for servicers who specialize in managing troubled mortgages, according to various sources in the market that have spoken with HousingWire.

Texas Attorney General Greg Abbott in December introduced a unique proposal that would place new restrictions on foreclosure prevention consultants — something that other states, including California, are considering putting into place as well. “At a time when regulators, policy makers and stakeholders are working to help struggling families, unscrupulous operators are scheming to profiteer at homeowners’ expense,” Abbott said. “Too many scam artists attempt to target homeowners with large fees and the false promise that they could help Texans avoid foreclosure on their homes.” Abbott, who proposed the Foreclosure Rescue Fraud Prevention Act alongside state Senator Craig Estes, R-Wichita Falls, says states need more power to crack down on bad actors in the foreclosure prevention space. Professional guidance yielding loan modification plans are definitely in demand, but some form of disclosures would minimize predatory lending.

The Act would require foreclosure prevention consultants to provide customers a written, plain language contract memorializing their services agreement. It would also require that these consultants obtain their customers’ written consent, in the form of a signature, before beginning any services or accepting any fees. An additional requirement mandates a written disclosure statement instructing homeowners to contact an attorney or a housing counselor before signing mortgage rescue agreements. “While most homeowners may never feel the threat of home foreclosure, it is an issue that can impact all of us when it strikes our neighbors, friends, and family,” Estes said. “This issue has impacted constituents in my district and across the state, we are here today to send a very clear signal that these actions by unscrupulous mortgage foreclosure consultants will not be tolerated.”

The written agreements mandated by the proposed law would apply to both foreclosure prevention consulting and equity purchase contracts. Both types of agreements would have to include plain language cancellation procedures. In addition to new disclosure requirements, the proposal would place new limits on equity purchase agreements. To protect Texans’ interest in their homes, the law would require equity purchase agreement buyers to pay at least 82 percent of the property’s fair market value. Read Complete Texas Foreclosure Article >

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05 Dec 08 Questioning the Mortgage Crisis

The Associated Press put out a story yesterday reporting that the Bush Administration ignored in-house warnings of an impending mortgage collapse in 2005, delayed enacting proposed rules for a year, and bowed to lobbyists in stripping out the harshest of the proposals. Today, we find ourselves in foreclosure crisis and in the middle of the worst housing recession in a generation, the proposal reads like a list of what-ifs: FHA house loans, VA mortgages and conventional have to change with the times to meet the needs of today’s homeowners.

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05 Dec 08 VA Home Mortgage Underwriting

VA Underwriting Standards

VA home loans involve a veteran’s benefit. Therefore, VA approved lenders are encouraged to make VA loans to all qualified veterans who apply.

VA’s underwriting standards are intended to provide guidelines for lenders’ underwriters as well as VA’s mortgage underwriters. Underwriting decisions must be based on sound application of the underwriting standards, and underwriters are expected to use good judgment and flexibility in applying the guidelines set forth in the following pages.


Basic Requirements

By law, VA may only guarantee a home loan when it is possible to determine that the veteran:

· Borrower must be satisfactory credit risk, and

· has present and anticipated income that bares a proper relation to the contemplated terms of repayment.

It provides guidance on how to treat income, debts and obligations, credit history, and so on, and how to present and analyze these items on the VA home loan analysis form. It does not deal with every possible circumstance that will arise; therefore, underwriters must apply reasonable judgment and flexibility in administering this important veteran’s benefit.

Read the complete published article> VA Home Loan Underwriting.

01 Dec 08 Can Obama Repair the Home Mortgage Lending Industry?

Here is the problem Mr. President Elect, the subprime meltdown and the foreclosure crisis problem is far more complicated than predatory lending from unscrupulous mortgage brokers. Banks do not like mortgage brokers and for years they fueled the fire that mortgage brokers caused the sub-prime meltdown. For the last decade, Banks have developed mortgage lending guidelines that created a housing boom. American homeowners prospered and what could go wrong. Lending guidelines in 2005 and 2006 went too far in allowing no money down home loans for borrowers with little, no or bad credit. The housing bubble bursted and jobs were lost. The home loan financing industry melted and banks tightened their guidelines to the point where average homeowners could not qualify to refinance into a fixed rate mortgage they could afford. FHA home mortgage loans have started to require certain credit scores and lenders like to play appraiser and reduce their appraised value to the point where everyone has been wasting their time. Home equity tanked and the foreclosure concerns became an epidemic.

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