In the nation's troubled housing market, mortgage loans backed by the Department of Veterans Affairs had a lower foreclosure rate than any other type of home loan in the industry as of the end of the last fiscal year, according to a VA press release.
"The dedication of VA's loan professionals, the support of our partners in the mortgage industry and most importantly, the hard work and sacrifice of our veterans have made this possible," VA Secretary Eric Shinseki said. "VA is making good on its promise to help veterans buy homes, and veterans are achieving their dreams."
Currently, VA reports that about 1.3 million active home loans were obtained using VA's Home Loan Guaranty Program. The program protects lenders from loss if the borrower fails to repay the loan, making home ownership more affordable for veterans, active-duty military and some surviving spouses.
More than 90 percent of VA-guaranteed loans are made without a downpayment, VA reports. Despite this, VA has the lowest serious delinquency rate in the industry, according to the Mortgage Bankers Association. Furthermore, VA says its percentage of loans in foreclosure is the lowest of all measured loan types - lower even than prime loans, which require high credit scores and a 20-percent downpayment from the borrower.
Depending on the situation, VA's loan specialists can intervene on a veteran's behalf to help pursue home-retention options such as repayment plans, loan modifications and forbearance. Additionally, under certain circumstances, VA can refund a loan, which involves purchasing the loan from the mortgage company and modifying the terms to make a new mortgage plan more affordable.
To obtain more information about the VA Home Loan Guaranty Program, call VA at (877) 827-3702. Information can also be obtained at www.homeloans.va.gov.