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VA Compromise Sales - A guide for Idaho homeowners facing foreclosure with VA loans

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Real Estate Agent with Keller Williams Boise
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VA compromise sale - A guide for Idaho homeowners facing foreclosure with VA loans

Va compromise sales - Department of verterans affairs sealIs a VA compromise sale in Idaho the same as short sale? 

Yes and no

Yes, it is like a short sale in that the proceeds from the sales will not cover the balance owed. 

No, in that there is a standard process to follow in order to obtain approval for the VA compromise sale, and they can usually be accomplished much faster than your standard short sale.

VA compromise sales in Idaho have very specific requirements and you will want to work with a real estate professional familiar with the process. 

Essentially to get a VA compromise sale approved in Idaho there are several required criteria and the sale must result in savings to the agency, over the costs of foreclosure.

What to do if you have a VA loan, need to sell, and owe more than the home is worth:

Seller Requirements:

1. Once it is apparent that the seller needs to consider the VA Compromise Sale Program, the seller should contact VA or his/her lender if they are a VA approved Servicer Loss Mitigation lender. Attached to this package is a list of VA approved Servicer Loss Mitigation lenders. You can also obtain an updated list from our website: www.vba-Roanoke.com.

2. A financial statement is completed and signed by all parties. The seller may obtain this from the lender if the lender has been approved to process the compromise sale on behalf of VA. Otherwise, the homeowner may obtain this form from VA. A financial statement from the VA can be downloaded from our website.

3. The seller should complete a letter of request.

4. A Compromise Agreement Sale Application should be completed. If the compromise sale will be processed by VA, the application package can be downloaded from our website. If the lender will be processing the compromise sale, an application package must be obtained directly from that lender.

5. On loans that originated on or before December 31, 1989, the seller should be prepared to sign a promissory note at closing agreeing to repay VA for the difference between the sales proceeds and the total debt. This indebtedness may be waived in order to process the transaction and avoid a foreclosure sale.

 

Here are some factors that will be considered for a VA compromise sale in Idaho:

  • The property must be sold for fair market value.
  • The closing costs must be reasonable and customary.
  • The compromise sale must be less costly for the Government than foreclosure.
  • There must be a financial hardship on the part of the seller.
  • On loans that originated on or before December 31, 1989, the seller must be willing to sign a promissory note.
  • There must be no second liens or other liens (unless the amount is insignificant).
  • In situations whereby there are second liens or other liens, the seller can request that the lien holder consider releasing the lien and converting the loan to a personal loan.
  • The seller must first obtain a sales contract in order to be considered for the program.
  • To protect the seller’s interest, the seller should make the sales contract contingent and/or subject to the approval of a VA compromise sale.

For more information on VA compromise sales in Idaho, you can download the Compromise Sale Program (Click Here).

For more information on Idaho's foreclosure laws and information regarding short sales in Idaho, visit: www.HopeForIdaho.com.

 

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