The Blog

It almost seems ironic that a mortgage program that offers 100% financing and accepts lower than average credit scores could become the mortgage industry leader. However, that is exactly what the VA loan program has accomplished during these recent years when other mortgage programs have been struggling with defaults and foreclosures.

In 1944, the Veteran’s Administration began the VA loan program which, through last year, has financed over 19 million homes worth over $1 trillion. Across the nation, VA loan volume has surged and since 2007 has increased 370%. In every state, except Guam and Puerto Rico, the number of VA loans for home purchases have grown during the current year 2013. During 2012, new home purchases accounted for 88,128 while previous home buyers accounted for 113,738. For the same year, 203,696 borrowers had restored entitlement. Offering 100% financing, 9 out of 10 VA loan borrowers, or 91%, put no money down when purchasing a home.

In a report dated November 7, 2013 by the Mortgage Bankers Association, VA loans had their lowest delinquency rate since 1980 (partly due to the fact that 40% of the VA portfolio has been originated since home prices crashed at the end of 2007).

Each year, the Veteran’s Administration releases the VA loan program statistics for the previous year. The January 2013 report showed that VA loans had the lowest foreclosure rate of any major loan product, including prime loans. In addition, the VA assisted nearly 300,000 VA mortgage holders avoid foreclosure. At the end of 2012, the VA loan foreclosure inventory rate was 2.08% which was below any other type of loan and well below FHA loans and prime ARMs. For over five years, VA loans have maintained the lowest foreclosure rate out of any major mortgage product available.

The Veteran’s Administration is able to maintain such phenomenal statistics because of their dedicated staff and servicing of these loans. VA keeps a close watch on the performance of loans and, at the first sign of trouble, is proactive in being a mediator between the homeowner and the lender. By doing so, the VA pushes for alternatives to foreclosure such as repayment plans, loan modifications and forbearance.

There are many benefits offered to borrowers who choose VA loans. The data provided by VA proves that these mortgages work for the home buyer and that VA is there to help their members attain successful homeownership for the long term. By providing a way to purchase a home with no money down to being there as an advocate when there is a financial need, VA continues to make good on their promise to be the best mortgage available in this country.

Feel free at any time to contact me for more information about how much entitlement you have, as well as, how much you can borrow anywhere across the country.

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