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VA Compromise

Posted by James Culak on April 14, 2012 at 10:01am in Short Sale Discussions

I was wondering if anyone could tell me what my chances are of getting approved for a VA compromise. 

I purchased the home in Dec 2006 in Florida for $155K using the VA. I still owe 142,786 on the loan and the house is now "worth" approx $65K according to Zillow. I have since moved to Colorado, and although I am fortunate to have tenants renting it now, I am still losing $400 a month by owning it.  While this doesn't cause me to be unable to pay my bills, it would sure be nice to have that $400 to put towards the other debt we do have. 

From what I have read in order to do a short sale I would have to miss payments for the bank to even consider one, is this the same with a VA compromise?  I don't want to sound like I am trying to re-nig on my commitment to pay for the house I purchased, but no one is willing to refinance a home that is this underwater and considered an "investment" property.  I would appreciate any help that yall can give me. 

Thanks

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Replies

  • Kevin - Greenville, SC April 23, 2012 at 5:46am

    Q9. Must the loan be 61 days past due to complete a compromise sale?
    A9. To be eligible for a payment, either incentive payment or claim payment, the loan must be a reportable default (i.e., 61 or more days delinquent).

    https://api.ning.com/files/GPYj5dAfyTLj8*MidMAG-Kl1uPiHD220mGHusvsFW...

  • Kevin - Greenville, SC April 18, 2012 at 8:15pm

    http://www.benefits.va.gov/roanoke/RLC/forms/COMP-SALEProgramTraini...

    • James Culak > Kevin - Greenville, SC April 19, 2012 at 4:41am

      Thanks for the pdf Kevin, that was very helpful and informative. 

      I do have on question, under " some examples of what is not considered a financial hardship"  it lists: Homeowner has sufficient assets he can liquidate.  While I do not have anywhere near the $70k that would be required to make up the difference in the price the house could sell for, and what the loan is I do have about $15K in a MMA that we have as an emergency fund. 

      Do you think if we did the VA compromise they would require me to deplete this account in order to help make up the difference?  Thanks again for all the help.

  • Pat Perrotta April 16, 2012 at 4:18am

    I am in Florida, the Panhandle, and I have handled a number of VA short sales.  Your hardship is apparent in that you had to move, you are losing money each month and you have other debt.  Call me so we can discuss your situation.  I'd be happy to help you.  The one thing you should be aware of is (unless things have changed recently) that you won't be able to use your VA to purchase another home unless you pay off any outstanding debt.  850-830-5541

    • James Culak > Pat Perrotta April 16, 2012 at 6:08am

      Pat, thanks for the quick reply.  I may have actually found a broker that will be able to get me the VA IRRL refinance for the property, so for now that is the route I am going to go.  If things change however you will be the first one I contact.

  • JACK L UNTHANK April 15, 2012 at 4:59am

    Need to know the lender , don't know if you can streamline since it is now a rental . Check with Wells or the bank who has it .

    Don't need an appraisal on an VA-errl re-fi.

    • James Culak > JACK L UNTHANK April 15, 2012 at 5:37am
      Jack, I used USAA for my loan. I have been told by various mortgage companies that I can't do a VA IRRL because they look at the property as an "investment" because I don't live in it and have tenants that I rent it to. They said the only easy I can do it is if my wife moves back to florida and lives there.
  • Wendy Rulnick April 15, 2012 at 3:11am

    James, You won't know whether or not you'll be approved for VA Compromise unless you try.  You can be current on your payments to get a VA Compromise approved, but as Kevin says, you must have a hardship...

  • Kevin - Greenville, SC April 14, 2012 at 12:32pm

    You need to have a verifiable Hardship to do a VA Compromise Sale.

    • James Culak > Kevin - Greenville, SC April 14, 2012 at 1:17pm
      Yeah, I had heard that having to PCS away from your home could be considered a hardship due to the market. Not sure if this is true or not. I appreciate your help.
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