Camp Pendleton and Twentynine Palms VA Compromise Sales: Will VA Pursue You for Deficiency?
There are more than just "short sale" and "foreclosure" options for military personnel who own a home that is "upside down" or "under water." The latter two terms mean, the owner of the home owes more to the bank that loaned the money to purchase the home than the owner could sell the home for in the current market; that is, market value is "short" of what is owed. This is not uncommon for homes purchased from 2005 to 2008 near Camp Pendleton, CA, and Twentynine Palms, and areas surrounding those military bases.
The below blog points to an important point for your mental health: this, too, shall pass. Owning a home that is upside down may seem to narrow your options, but in fact having six different options gives you breathing room and a choice over how to handle the situation. If (when?) loan modification doesn't work, steel yourself and get ready to work the other options that also protect you though in differing ways and degress. Generally, there are alternatives that minimize the bad results of any decision; the VA guarantee giving a veteran relief from owing the amount that is "short" goes a long way toward protecting our veterans, including the many who find themselves in able to do a VA compromise near Camp Pendleton or 29 Palms, CA. Thank you, Wendy, for teaching and sharing more about the many options available to military personnel!
PSCing to a new base? If you are an Eglin Air Force Base or Hurlburt Field airman and own your home, this could be a problem. You may very well be "upside down" in your mortgage. Meaning, the balance you owe is more than market value of your property. That is a common scenario on the Emerald Coast, in Crestview, Navarre, Fort Walton Beach, and Destin Florida.
When you are in this situation, you have six choices:
1. HAP
2. Short Sale
4. Rent Out Your Property
5. Pay the difference owed out of your own pocket
6. Foreclosure
If your loan was guaranteed by the Veterans Administration (VA), and the other options won't work (obviously you don't want a foreclosure), you can do what is called a VA Compromise Sale. This program is similar to a short sale, but the VA guarantees the payment of a portion of your mortgage to your lender. The lender will handle the processing of your VA Compromise Sale and will use a VA appraiser to ascertain value of your property after they receive a contract. If you meet certain criteria, and your net proceeds are at least 88.13% of the appraised value, your sale may be approved.
The most frequent question I get about VA Compromise Sales is: "Will the VA come after me for the balance?"
The answer is "NO" unless there was "fraud, misrepresentation, or bad faith”.
Here is a quote from VA Home Loan Program:
"The VA guaranty, which protects the lender against loss, encourages the lender to make a loan with terms favorable to the veteran. But if you fail to make the payments you agreed to make, you may lose your home through foreclosure, and you and your family would probably lose all the time and money you had invested in it. If the lender does take a loss, VA must pay the guaranty to the lender, and the amount paid by VA must be repaid by you. If your loan closed on or after January 1,1990, you will owe the Government in the event of a default only if there was fraud, misrepresentation, or bad faith on your part."
The other good news about a VA Compromise Sale (also called Offer In Compromise, Comprise Offer) is that you CAN USE YOUR VA LOAN AGAIN! The caveat is that you must pay back what you owe the VA. Crazy? Not really. Markets change, loan programs change and interest rates change. A VA mortgage may be the best option for you again in the future. At that time, you will have rebuilt your financial strength and may be able to pay back your entitlement. I've had veterans do it!
If you need to do a VA Compromise Sale in Crestview, Navarre, Fort Walton Beach or Destin, Florida, give me a call. I can help.
It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com
HAP, Short Sales & Pre Foreclosure Help.
Wendy is a HAP, short sale, VA Compromise and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
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