VA Loans – Avoiding Foreclosure is Possible
Many have experienced job loss in the 2008 recession. And, families in 2009 are finding it harder and harder to pay bills on time and in full. What’s more home values are shrinking and mortgage delinquencies are rising. U.S. housing market is in crisis. Bank-owned properties are for sale on practically every street, and Q1 2009 economy is showing no relief. Foreclosure is everywhere.
A foreclosure happens when a borrower defaults, or fails to repay a mortgage debt and the lender proceeds to sell the property that served as collateral for the loan. It goes without saying that a foreclosure is not pleasant for anyone. The homeowner loses a home and the lender is left with the unpaid debt and a property that may or may not sell. And, building enough credit to qualify for a mortgage again after foreclosure is a huge undertaking.
But, foreclosure can be avoided for many VA borrowers through mortgage counseling.
Through VA Outreach, mortgage counseling is a resource against foreclosure for VA-eligible borrowers. The Program provides extensive mortgage counseling services as a benefit for those with military affiliation.
The Program provides outreach to two different groups of veterans: those with VA loans and those with other types of loans, in efforts to keep the military affiliated in their homes. Veterans and active-duty personnel can better deal with financial crises by applying the program’s proven methods.
In some situations, a VA counselor can intercede with the lender on the veteran’s behalf to pursue mortgage-saving options such as repayment plans, forbearance, and even loan modifications. Each offers an alternative to foreclosure.
The VA counselors deserve a lot of credit for the VA Outreach Program’s success. There are counselors in nine regional loan centers throughout the country. Each counselor is considered an expert who can assist people in avoiding foreclosure through advice and special financial planning. Counselors can also assist veterans with other financial problems.
The VA mortgage counseling services are free to veterans and active military personnel. The Program has a proven track record for saving loans from foreclosure. Through the VA Outreach Program, borrowers are educated on improved VA mortgage options which may be particularly beneficial to those experiencing financial distress and those who are in loan default.
One of the newest VA outreach missions is to contact veterans experiencing financial distress due to high monthly mortgage payments and inform them of the latest improved options for refinancing at lower rates with VA loans. Since the Veterans’ Benefits Improvement Act of 2008 was signed into law in October of 2008, VA-eligible borrowers have been able to get up to 100% refinancing with VA loans. In other words, no money down is required for refinancing with a VA loan.
A VA mortgage counselor will most likely discuss one hundred percent refinancing with the VA Home Loan Program whether a veteran has a VA loan or some other type of loan. The best time to take advantage of this option is before default or delinquency occurs. Refinancing at 100% with VA loans can eliminate financial stress for many veterans, save mortgages from foreclosure and even provide cash out of equity to pay down debts or make home improvements.
Another refinance tool that a VA Outreach counselor might discuss is the VA Streamline Program. With VA to VA Streamline loans a veteran’s mortgage payment record must be good, but there is no need for an appraisal, income verification or full credit report. Streamlines are good for someone whose credit, income and/or home value has been negatively affected by the down economy.
Since 2000, the VA Outreach Program has assisted more than 74,000 veterans, active-duty personnel and surviving spouses. This translates as a savings of $1.5 billion in saved mortgages due to foreclosure-alternative counseling.
In the end, repayment plans, forbearance, loan modifications, 100% refinancing, and VA Streamlines can all be successful in saving a VA loan from foreclosure. And, the VA outreach program continues to reach out to veterans who face foreclosure.
Author: Isacc Davis
Article Source: EzineArticles.com
Provided by: Electric Pressure Cooker