How to Avoid Foreclosure VA Loans

The VA Foreclosure ratio for other types of default loans is very small. There are no sure things in the mortgage industry. The only sure thing is if you make a mortgage payment, you remain. If not, you won’t. But VA loans are almost close, as borrowers can somewhat hedge against default.

Following the subprime mortgage hypothesis, loans supported by the Department of Veterans Affairs continue to provide veterans with a secure way to fund home purchases.

These low-budget loans come with a rigorous and flexible buyout process that helped isolate veterans and their families from tainted liabilities and foreclosures.

VA Foreclosure rates

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In fact, VA loans have the lowest take-up rate of any major credit product available, according to the latest data from the Mortgage Bankers Association. Here’s an overview of the Q4 2009 opt-out rate:

  • Enterprise subprime loans: 15.58%
  • FHA Loan Write Off: 3.57%
  • Selling Credit Credits: 3.31%
  • VA loan withdrawal: 2.46%

Despite the success of the exemption, VA loans and veterans have not been fully immune to the economic crisis in the past two years. However, the Department of Veterans Affairs has worked proactively to keep veterans and active duty members from losing their homes.

Avoiding Foreclosure from a VA Loan

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The agency is urging veterans who make an effort to contact their lenders immediately and explore options to avoid foreclosure.

Loan repairers may be able to provide veterans with one or more of the following options:

  • Loan amount
    Veterans can get extra time to pay off their obligation.
  • Credit modification
    The borrowers are canceling the non-performing loan repayment and starting a new payment schedule.
  • Repayment mode
    Veterans pay a portion of unpaid payments each month along with their regular amount.
  • Short sale
    Borrowers can allow fighters to sell their home for less than the homeowner.
  • Deed-in-Lieu Foreclosure
    Instead of going through the exemption, veterans can transact assets through a loan service. Most lenders would prefer to avoid the costs and headaches that come with trying to formally stop on a property.

 

Veterans becoming delinquent on VA credit can use the services provided by the agency to address the issue. VA borrowers may also seek the assistance of a specialist at one of eight regional lending centers and two special service centers. To find your nearest mall, call.

Some veterans may also be able to qualify for protection by default under the Civil Aid Act of the Republic of Serbia or SCRA. Eligible veterans can receive a lower interest rate of up to one year and deduct property benefits or eviction for up to nine months from their military service period.

Veterans with non-VA credits

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Obviously, VA is limited in what it can do to intervene when veterans have mortgages not supported by the agency. Veterans may be able to refinance their existing conventional loan into a VA loan for up to 100 percent of the property’s value.

Veterans can also contact the HIPE NOW Alliance for help. This group of advisers, mortgage companies and other professionals provides literacy, counseling, and assistance to homeowners struggling to stay afloat.