I have a client who has a VA loan on a property that we will be short saleing. Will he be able to use the VA loan again down the road? I was thinking that we could get forgiveness on the amount owed after the sale, but would he still be able to use the balance that he paid off at a later date. Example: 400k VA loan, short sale recovers 250k, would he be able to use the 150k or will he not be able to use VA ever again.
Thanks for your comments,
Nancy
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Nancy - The amount of entitlement NOT repaid (due due the loss) will not be available for future VA mortgage loan unless its repaid. He may have remaining entitlement, though, even after the VA Compromise Sale. He needs to call the VA directly and find out his specific entitlement balance and potential new mortgage entitlement. I woudn't recommend trying to figure it out for him. He needs to go to the source. The Veterans Administration is always happy to answer questions.
And, adding to what I just wrote, he can always repay the lost entitlement. But have him check directly with the VA for figures.
Thank you so much Wendy. I just wanted to make sure that this was even an option, trying to explain why a short sale may be more beneficial than just walking away (divorce situation, so sellers are not always on the same page!) and letting go into foreclosure.
VA has decided to automatically determine
that the cooperation of the borrower in
completing a deed-in-lieu of foreclosure
or a compromise sale is sufficient to
justify VA waiver of collection of any
indebtedness. Accordingly, the final
version of § 36.4822 does not require the
holder to obtain a promissory note in
connection with a deed-in-lieu of
foreclosure or a compromise sale.
http://www.gpo.gov/fdsys/pkg/FR-2008-02-01/html/08-337.htm