Tuesday, March 4, 2014
VA Loan Compromise Sale - Short-Sale, VA-style
VA homeonwers who are underwater - there may be an option for you to "short-sale" your homewithin VA guidelines. There are specific rules and processes, but it can be done. We all know that "stuff" happens and the VA knows it too. Here in theAustin and Highland Lakes areas of Central Texas, our home sales are very active in many areas and in many price points, but if you purchased your home at a market high, you may still be in a negative equity position.
Contact us for more information about your home's market analysis - you may not need a VA Compromise Sale, but if you do, here are some guidelines:
VA Compromise Sale Conditions
1. Seller has financial hardship
2. Property must be sold at fair market value (offers lower than the appraised value may not be considered)
3. Closing costs must be reasonable
4. Must be less costly for the government than a foreclosure
5. Lender must be willing to write off debt above maximum VA loan guaranty
6. There can be no second liens or other liens on the property.
7. There is an offer/sales contract on the property.
Possible Qualifying hardships
1 Employlment changes
2. Permananet Change of Station (PCS) (this is the most common issue)
3. Decrease in Income
4. Major Medical Expenses
5. Death in the Family
1. A decision to move to a different neighborhood or area or to move-up or downsize.
2. Reduction in property values in an area without a qualifying hardship
3. If you have adequate assets to cover the gap
Prior to lisitng your home for sale, if you know that you may need to use a VA Compromise Sale, you shoudl contact your mortgage servicer to find out their process.
This may impact your VA loan entitlement. The benefit may still be availalbe but may reduce the amount of your VA loan entitlemet.
1. Contact signed by all parties with the following language "Offer contingent on approval of a VA Compromise Sale"
2. Good Faith Estimate from a Title Company relating to this sale
3. Letter of Request to the Loan Servicer
4. Financial Data and Supporting Documentation (this includes a signed Financial Statement)
5. VA Compromose Sale Agreement Applicaiton
Additional Requirements will include a current appraisal and a full title review.
A VA Compromise Sale will generally take longer than a typical home sale. The VA cannot pay any more than the original loan guaranty.
Let us know how we can help with your Central Texas Home Sale - Contact us for a free Market Analysis to determine your Austin or Highland Lakes are home's value.
Special Note: Loans originated on or before December 31, 1989, the servicer is required to write off any amount over the maximum guarantee.