Does VA generally write their approval letter waiving the deficiency?
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Does VA generally write their approval letter waiving the deficiency?
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In addition to what Kevin said about entitlement...
The most frequent question I get about VA Compromise Sales is: "Will the VA come after me for the balance?"
The answer is "NO" unless there was "fraud, misrepresentation, or bad faith”.
Here is a quote from VA Home Loan Program:
"The VA guaranty, which protects the lender against loss, encourages the lender to make a loan with terms favorable to the veteran. But if you fail to make the payments you agreed to make, you may lose your home through foreclosure, and you and your family would probably lose all the time and money you had invested in it. If the lender does take a loss, VA must pay the guaranty to the lender, and the amount paid by VA must be repaid by you. If your loan closed on or after January 1,1990, you will owe the Government in the event of a default only if there was fraud, misrepresentation, or bad faith on your part."
Wendy, this just got me a new listing. GREAT information. Thank you for sharing your time, talent and knowledge with us (same to you Kevin from Greenville)!
Thank you!
The specific wording on the VA official site includes the following;
“…although the veteran’s debt was waived by VA, the Government still suffered a loss on the loan. The law does not permit the used portion of the veteran’s eligibility to be restored until the loss has been repaid in full.”
The VA doesn't write the Approval Letter. The Loan Servicer/Lender does.