compromise (2)
The Emerald Coast of Florida has a high military population with both active duty and retired air force personnel. Eglin Air Force Base is located in Fort Walton Beach, and Hurlburt Field is in Navarre, Florida. Duke Field and NAS Whiting Field are nearby. We will be seeing an increase in short sales for GI borrowers when they must relocate during their PCS moves (permanent change of station). VA Short Sales are called "Offers in Compromise", "Compromise Claims" or "Compromise Sales". The VA may accept a Compromise Sale if the cost to the VA is determined to be less than that of foreclosure.
The VA website says: "If the borrower is unable to sell the property for an amount that is greater than or equal to what he/she owes on the loan, including closing costs, VA may pay a "compromise claim" for the difference in order to allow the private sale to go through. The borrower can sell the property to a buyer who gets his/her own financing or to a buyer who wants to assume the loan. However, with a compromise assumption, the lender does have to agree to have the amount of its guaranty reduced by the amount of the claim payment. In order to be considered for a compromise sale, several factors must be considered."
VA Compromise Sale Factors:
1. You may only sell the home for fair market value.
2. The closing costs must be "reasonable and customary".
3. You must have a valid financial hardship such as loss of income, relocation, death of breadwinner, etc.
4. There should not be a second mortgage on your property, unless it is "insignificant". If so, you might ask the junior lienholder to release the lien and convert it to a personal note.
5. You should ensure your sales contract is "contingent and/or subject to the approval of a VA compromise sale."
If you have a VA loan, and need to do a "Short Sale" or "Compromise Sale", here is what you must do to begin the process:
1. Contact you lender to see if they are an approved VA Servicer Loss Mitigation lender and/or contact the VA regional office servicing your loan directly.
2. Fill out a financial status report form provided by your lender or the VA.
3. Complete a letter of request.
4. Complete a Compromise Agreement Sale Application. You can get this form from the VA or the approved lender.
Final Important Points:
1. Your lender does not have to agree to a Compromise Sale.
2. For VA loans originated on or before December 31, 1989, you might have to sign a promissory note at closing agreeing to repay VA for the deficiency remaining after the property is sold.
3. An experienced Short Sale Realtor should guide you through the sales process, help you determine fair market value and prepare your package for submission to your lender or the VA.
For more information, contact your VA Regional Loan Center.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
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Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for almost 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she also negotiates successfully to her buyers' and sellers' advantage. She is supported by a team of top buyer specialists. Wendy lists and sells homes, condos and townhomes in Destin Fl and the surrounding areas. She was ranked in the top ½ percent of all Realtors on the Emerald Coast of Florida in 2008 for resale listings sold.
All Rights Reserved. "VA Short Sale Guidelines (VA Compromise Sales)" Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2008 by Wendy Rulnick.This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.
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