Stump the Broker - No appraisal on VA Vendee Loan?

Real Estate Agent with HomeSmart Real Estate BR030809000 AZ Broker BR030809000

One of my agents came to me with a dilemma today that I've never heard before. I've done some research but I'm not quite sure if I have all the correct information.

Here is the situation:

Our agents buyer purchased a foreclosed home that was bid up over list price and is due to close in early June. The FHA appraisal came back today at $9000 less than the agreed upon sales price.  The VA  said NO to reducing the sales price, but here is our counter offer........

Buyer to obtain a VA vendee loan and it must be with Bank of America in Dallas. Up to 108% financing. 580 FICO with good credit. 4 1/2 % - 30 year loan. 2% funding fee can be rolled over to loan. Buyer does not have to be a vet. Home sold AS-IS. No appraisal will be required. Closing to be before July 30, 2009. Good Faith Attached.

Information on VA Vendee Loans

So tell me, how on earth can you get a VA vende loan with no appraisal knowing the FHA appraisal came in $9K less and be serving your client best interests?  I'm shaking my head wondering...what the heck? 

What would you do?  What seems like the right way to handle this situation? Have you dealt with a similar situation?  Please share your thoughts and ideas and help everyone to understand how best to handle a situation such as this one.

Posted by




Anna “Banana” Kruchten

Broker, CRS, CRB

HomeSmart Real Estate


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Certified Residential Specilist CRS

AZ DRE Certified Real Estate Instuctor


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Richard Dolbeare, R(B)
eXp Realty - Wailuku, HI
R(B), ABR, CRS...Hawaii Multi-Island Specialist

Hi Anna.  I don't quite understand the question so don't have an answer.  But I'm responding to thank you for the tip on this type of loan.  I flipped over to the VA site using your link and am reading about it now.

May 19, 2009 05:57 PM #1
Susan Templeton
Bellingham, WA

Since VA is assumable and Ocwen obviously has more foreclosures on their books than they can handle it sounds like they are able to essentially offer these properties up to the best prospect. They are naming their own terms on rates. Much like a Freddie or Fannie REO list. Nice if they would publish the list by zip code....looking for that now! Buyer beware on the value and condition. Most foreclousures have problems so bidding up the price could backfire!

May 19, 2009 06:09 PM #2
Janice Roosevelt
Keller Williams Brandywine Valley - West Chester, PA
OICP ABR, ePRO,Ecobroker

This is beyond me so i will be checking back to see how this ends. Thanks for the post

May 19, 2009 10:06 PM #3
Anna Banana Kruchten Arizona's Top Banana!
HomeSmart Real Estate BR030809000 - Phoenix, AZ

Hmmmm......looks like this is a program a lot of agents aren't familiar with.  It will be interesting to see what becomes of this today.

Thanks Richard, 'Loannetter'. and Janice for stopping by!

Loannetter.....The No appraisal part requred is what perplexes me.  How can that be ok?  Reagardles of how many properties they have on their books that seems like it's not protecting the public.  Yes the rates and terms are good but that isn't what concerns me.  So it's ok for a bank to extend a home loan up to 108% and no appraisal.  It just sounds like back in 04/05 when all the shady stuff was going on.  Am I missing something here?

May 20, 2009 03:08 AM #4
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Anna, I've never heard of this loan so I'm going to go check it out. Indeed, smacks of the 'good old days' to me! (only now we're finding out they weren't so good, were they?)

May 21, 2009 05:59 AM #5
Anna Banana Kruchten Arizona's Top Banana!
HomeSmart Real Estate BR030809000 - Phoenix, AZ

Sharon......I did find out a lot about this loan.  Smoking deal for VA forecloused properties.  I am hoping a lender who really knows this program writes a post about it.  I don't feel qualified to do that!

May 21, 2009 11:32 AM #6
Daniel Curran

I found your story today. I was cruising the web because the same thing just happened to one of our buyers, except the difference was $23,000. I have contacted your office, in addition to contacting our Senators and the media.

Jul 16, 2009 08:42 AM #7

I'm a small time real estate investor who has purchased Vendees--i've run into MANY problems  (buyer beware).  My issue is that I put in a written offer per the VA guidelines and contract, the asset manager countered my offer in writing.  I accepted the counter (didn't change a thing) and now the asset manager is saying another offer came in so we are in a Highest and Best situation.  How can that be?  I accepted the counter and all his terms--is that not legally binding?  After reading these blogs, I'm thinking the asset managers (Banc of America) that the VA hires are engaged in some shady practices. Help.

other data:  my agent put the acceptance in writing for me before the requested deadline and my agent also told me we were under contract.  My agent is also the listing agent on the property.  The asset manager insists we have no contract.poha

Apr 14, 2010 09:33 AM #8
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