VA Loan After Bankruptcy

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VA Loan After Bankruptcy

  1. 1. How to Get A VA Loan After A Short Sale Foreclosure or Bankruptcy To Get the Complete Book VisitSocalvaloans.com and signup in the sidebar 1
  2. 2. ContentsAbout a VA Loan ....................................................................................................................................................................... 3Veterans Experiencing A Short Sale/Foreclosure/Bankruptcy ........................................................................... 4Bankruptcy ................................................................................................................................................................................. 4Short Sale .................................................................................................................................................................................... 4Foreclosure ................................................................................................................................................................................ 5First About Credit Bureaus .................................................................................................................................................. 6Building Good Credit after Bankruptcy .......................................................................................................................... 6More in the Complete Book! To Get the Complete Book Visit Socalvaloans.com and signup in the sidebar 2
  3. 3. About a VA LoanA VA loan is a mortgage loan that is guaranteed by Veterans Affairs. VA loans are not madeby the government, nor are they funded from the government, rather they are made byprivate qualified lenders such as banks, savings & loans, or mortgage companies. They areavailable to eligible veterans for the purchase of a home which must be for their ownpersonal primary residence.An eligible veteran is one who one who is currently or who has served in the US Military forat least 181 days. These branches of military include but are not limited to the Marines,Navy, Army, Air Force, and National Guard. Surviving spouses of veterans may also beeligible. 3
  4. 4. Veterans Experiencing A Short Sale/Foreclosure/BankruptcyThe United States experienced a housing bubble in the late 2000’s. With the cost in houseprices reaching a peak around 2006, many homeowners were faced with upside downmortgages in the following years. This, coupled with job loss in a struggling economy, haveforced millions of Americans to default on their loans whether it be from a credit card,mortgage, bank loan, or other. Many people declared bankruptcy. If they had a mortgage,many either sold their home through a short sale of their home, or walked awaycompletely.BankruptcyAmerican veterans were not sheltered from this trouble. As the California economycontinues to go through some tough times, some veterans are forced to go throughbankruptcy protection. Bankruptcy is when a person cannot pay his or her debt to theircreditors. By declaring bankruptcy, relief is received through restructuring or cancellationof debt. Some debts are not released from responsibility such as spousal and/ or childsupport, student loans, and some taxes.Out of the six Chapters of Bankruptcy one can declare, most individuals declare Chapter 7which is a basic liquidation of property. This property can include any valuable collectibles,vacation homes, family heirloom, or a second vehicle. Any proceeds from the sale of thisproperty would be used to pay off unsecured creditors. By declaring bankruptcy, manyveterans can get back on their feet and re-establish their credit.Short SaleThere are also thousands and thousands of VA eligible homeowners in California that havegone through a short sale in the past few years in California. Many property sellersexperienced a “short sale” to sell their home because the sales price was lower than themortgage loan balance they had on the property. This is called a “short sale”. The lenderagrees to accept the new buyers’ price even though more is owed from when it wasoriginally purchased. When a borrower completes a short sale, the mortgage that wasinvolved is most often reported on their credit as a derogatory item stating “settled for lessthan full balance”. The way this former mortgage is reported to the credit bureaus alertsthe VA underwriter to the fact the borrower applying for the VA loan had a previous shortsale.The benefit to the seller is that they do not have a foreclosure on their record. In somecases, this obligation to repay any deficiencies of the loan is released, but they will still have 4
  5. 5. a negative credit on their report. The benefit to the lender is avoiding foreclosure fees andcosts. Lenders also avoid having a house sit empty on street. Lenders are not in thebusiness of “owning a house”, and for the right customer, the lesser of the “two evils” is ashort sale over a foreclosure.Foreclosure There are many veterans across the state of California who also lost their home toforeclosure in the past few years. A foreclosure is where the lender completely takes back(repossess) the house for payments not made. When the homeowner defaults on theirloan, the lender takes possession to the property. The impact of a foreclosure is felt acrossthe board. Beside it affecting a neighborhood with lowering property values, highforeclosure rates in cities experience higher crime and thefts. Empty houses invite beingbroken into and also influence the visual esthetics of a neighborhood when there is no oneto take care of the house.If you are one of the millions of Veterans experiencing or have experienced a short sale,foreclosure, or bankruptcy, the dream of owning your own home is still possible. Many maywant to take advantage of today’s low home prices in California and get a VA loan to buy anew residence. You may already be eligible to use a VA home loan to buy once again with100% financing. Getting your credit back on track is the key, but how does one go aboutdoing so? 5
  6. 6. First About Credit BureausThere are three National credit agencies: Experian, Equifax, and TransUnion. Each isindependent of each other. They gather their information on consumers from credit cardcompanies, banks, lenders, and others. In turn, these companies obtain information onconsumers to make decisions on whether to approve loans, or to even adjust currentconsumer accounts.Each of the three credit bureaus gives a score to each consumer. The most common scoreis the FICO score (named because it was developed by Fair Issac and Company), it iscalculated based on type of accounts that you have opened. Also taken into considerationis how long accounts have been open, their balance, available credit, length of credit historyand payment history. Closed accounts are taken into consideration by how long they wereopen and how many there are. Closing an account may NOT lower your score. They will stillshow on your credit report. Also, having a longer history of managing a credit card can be agood thing. Each credit bureau may have a different name for their score but each is basedon the principals of FICO.Lenders use a score from the credit bureaus but each score may be different based on whatdata was reported to what agency. Lenders may include other information about you.Scores change over time, so your score might change month to month as you rebuild yourcredit.Consumers are allowed to receive a free copy of their credit report from all credit bureausonce every 12 months. Call all three to request your copy. Pull your credit and correct anyerrors. One example of a mistake is that people with common names will find otherpeople’s information in their own file. Some studies show that one in four people have amistake or error on their credit report. By receiving your own copy, you’ll be able to catchor correct these mistakes.Building Good Credit after BankruptcyIf you are one of the millions of Americans who have declared bankruptcy and think youhave “bad credit”, it may not be as bad as you think. Though your credit score may fall asmuch as 200 or more points after a bankruptcy, it is possible to qualify for 100% financingwith a VA loan just two year after filing Chapter 7 Bankruptcy. VA loans only require twoyears compared to FHA of 3 years and conventional of 4 years.. 6
  7. 7. To Get the Complete Book Visit Socalvaloans.com and signup in the sidebarResources 1. www.socalvaloans.com 2. www.socalvaloans.com/get-a-va-loan-after-a-short-sale/ 3. www.socalvaloans.com/va-loan-after-foreclosure/ 4. www.socalvaloans.com/va-loan-after-bankruptcy/ 5. www.facebook.com/valoanaftershortsale 6. www.benefits.va.gov/homeloans/ 7. www.va.gov/ 7
  8. 8. About the authors:Amanda White is licensed real estate professional. She worked many years with adultswith developmental disabilities in assisting them to get their credit restored. She has beenin the real estate business since 2006 investing in buying and selling single familyresidences including short sales. She also draws her experience from living and working inSan Diego which is home to 16 significant naval and military locations including MarineCorps base, Camp Pendleton and Naval Base San Diego. Amanda enjoys reading, travel, andentertaining. She is married with 3 special needs dogs.Rob Chomentowski is a Sr. Loan Officer with Affinity Financial, a highly respected customerfocused San Diego CA based Mortgage Company run by 20+ year veterans of the mortgageindustry and made up by only highly experienced loan officers. Rob has been assistingCalifornians obtain mortgages to purchase homes and refinance for the last 10 years. Priorto working in the mortgage industry, Rob spent many years as a market research analystand product manager in the high technology industry in Silicon Valley. Rob specializes onlyin 1-4 unit residential financing and prides himself on an especially deep knowledge of theever changing mortgage lending guidelines, and a broad expertise spanning VA loans, FHAloans, conventional loans, jumbo loans and investment property loans. Rob is licensed withthe California Department of Real Estate and the Nationwide Mortgage Licensing System. Inhis spare time Rob enjoys traveling, hiking, golfing, attending sporting events, reading andinvesting in real estate.Thank Youwww.SocalVALoans.com888.242.1723 8

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