It's no secret that foreclosure rates are up in recent years. However, amid all the turmoil associated with job loss, the economy and other factors, the VA loan program has emerged as a relatively stable force in the otherwise volatile mortgage loan market. The following foreclosure statistics published by the Mortgage Bankers’ Association for the fourth quarter of 2009 illustrate the remarkable difference between the loan types:
All Mortgages: 4.58% in foreclosure
Prime Mortgages: 3.31% in foreclosure
Subprime Mortgages: 15.58% in foreclosure
FHA Mortgages: 3.57% in foreclosure
VA Mortgages: 2.46% in foreclosure
These impressive figures come after a banner year for VA loans, which saw an 80 percent increase in loan volume during 2009. Nearly $70 billion dollars in loan funds were guaranteed by the Department of Veterans Affairs last year.
The majority of the VA program’s success in keeping its foreclosure rate down can be directly attributed to the Department of Veterans Affairs itself. The VA works tirelessly to ensure that relatively few veterans and their families lose their homes, and the effort includes a variety of helpful programs aimed at offering assistance.
Veterans who are concerned about not being able to make payments are permitted to put their loan into forbearance, which provides the service member with time to cover their missed payments without the looming threat of foreclosure. If there is a lifestyle change or a job change that does not allow veterans to catch up and make their regular payments, loan modification is also available. With a loan modification, veterans are provided with a new payment schedule with the delinquent amount of the loan factored into the new payment. Veterans are also able to catch up on missed payments by including delinquent funds into their regular monthly payment.
If repayment of their loan is an impossibility and an agreement cannot be reached, veterans with a VA loan are usually allowed additional time to sell their house to another individual or a family member without the worrying about imminent foreclosure.
The VA staffs eight centers across the country with loan counseling experts who are ready to help veterans, active duty service members and their families keep their homes whenever possible. Even if veterans and active duty service members do not currently have a VA loan but are concerned about another mortgage, the VA loan experts may be able to help.
Concerned homeowners can call a special hotline at (877-827-3702) to get in touch with a loan counselor at the closest VA loan servicing center and begin the process of returning their mortgage to a good standing.
This article was written by Chris Birk of VA Mortgage Center.com, an online VA-only lender.