Veterans Affairs (VA) is a department of the US Government. It is run by the government to execute the military veteran benefit systems along with the Cabinet level status. The VA department is responsible for administration of veteran programs benefits for the veterans, their families, & the survivors. The benefits in this program include disability compensation, education, pension, life insurance, home loans, vocational rehabilitation, medical benefits, survivors’ benefits, and burial benefits.
Now consider Colorado Springs. This area has high level of military population that are both active & the retired personnel. The landmarks of this area include Fort Carson Army Base, Peterson AFB, the Air Force Academy, Schriever AFB, NORAD, Cheyenne Mountain AFS, etc. Now this area is witnessing a steady rise in short sale for the GI borrowers. The army people often have to go in for PCS moves, i.e, the permanent change in station. In that case, the VA Short Sales take place. It is also known as the ‘offers in compromise’, ‘compromise sales’ or the ‘compromise claims.’ VAs accept the compromise sale in case the cost to the VA is evaluated somewhere less than the foreclosure.
Getting to the core of Veteran Affair short sale, here is a statement that defines it in brief:
When the homeowner receives an offer as per the current market value and that turns out to be lower than the total value of the loan pay off, the home owner can ask the Veteran Affairs department to approve short sale or a compromise sale. Veteran Affair reviews the situation with the mortgage company. In case they approve it, the VA pays the difference between mortgage balance & the proceeds of the sale. At times the mortgage company approves the sale on behalf of VA through the Service Loss Mitigation Program. To be very precise, many mortgage companies now have the Loss Mitigation Department that is authorized by the VA in order to process the VA short sales or the VA compromise sales.
Here are some basic facts about VA short sales that would help us understand this process better:
· The property in consideration must be sold at the market value. Its closing costs must also be reasonable & customary. Also there must not be any second liens or any other liens on that property. Also seller must be going through a financial hardship.
· You must fill in the financial status report form provided by the lender or the VA. You must also complete the letter of request. Alongside you must also complete a Compromise Agreement Sale Application. The sales contract should be the ‘contingent or subject to the approval of VA compromise sale.
· The lender must also be contacted to check if they have actually approved the VA Service Loss Mitigation lender. Then contact the VA regional office that services the loan directly.
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