What are VA foreclosures ?
The US department of Veterans Affairs (VA; www.va.gov) provides guaranteed home loans and mortgages for veterans of the United States Military. As with other home loan schemes, a number of borrowers default on their repayments every year and their homes are repossessed and sold on as foreclosures.
In fact, the VA does not provide financing itself. Instead, it acts as guarantor for home loans provided by private lenders such as banks and mortgage institutions. This allows veterans to borrow larger sums of money and obtain loans or mortgages without the need for a downpayment. Full details of the scheme can be found on the VA Home Loans website - www.homeloans.va.gov.
The prevalence of VA foreclosures is more a reflection of the risks involved in no-downpayment home loans than a comment on the credit-worthiness of veterans. Nevertheless, a number of veteran-owned properties are auctioned off every year as a result of VA foreclosures and many end up becoming the property of the VA.
Unlike civilian borrowers, veterans on the VA home loan scheme do have somewhere to turn. The VA offers free counselling to veterans who default on loan repayments and it may be able to help arrange special repayment plans or refinancing as an alternative to foreclosure. If you find yourself in this position, contact one of the VA's Regional Loan Centers using the toll-free number ***IS-THERE-AN-ICON-FOR-TELEPHONE-NUMBERS?*** 800-827-1000.
However, it is important to note that the VA only acts as a counsellor for veterans. Any payment plan or mortgage adjustment must be agreed between the homeowner and the lender who provides the home loan.
In addition, the VA will not pay off the balance of a loan or mortgage if a borrower passes away before the debt is repaid. Veterans should consider taking out additional private mortgage insurance to avoid passing on the debt to a surviving spouse or creating a liability for the person who inherits the estate.From a buyer's perspective, VA foreclosures are similar to other foreclosures offered by government departments and mortgage lenders. Properties that become the property of the VA after foreclosure auctions are sold on through the private real estate broker Ocwen Financial Corporation (www.ocwen.com). The Ocwen website has a nationwide search engine for VA properties.