VA, Congress is helping Veterans with VA loans

June 10, 2008 - PRLog -- A countless number of veterans and service members have recently lost their homes and many more are also facing foreclosure due to the mortgage crisis that has enveloped our country.  In order to help veterans out, lawmakers are pushing legislation to raise VA loan ceilings, lower VA funding fees and expand the VA's ability to help veterans refinance loans they can't afford.

The Department of Veterans Affairs has been encouraging veterans, military members, and surviving widows with at-risk loans to seek advice from VA loan counselors even if their loans are not VA-guaranteed.  They believe that these VA loan experts will be able to help out many veterans by giving them a few tips and options for their mortgage.

VA loan counselors have helped 74,000 homeowners since 2000.  That includes half of all VA loans in serious default last year.  This ultimately saved the government nearly $1.5 billion.  The VA Loan Guaranty program avoided the subprime loan downfall.  While delinquency rates have risen over the past five years for subprime, FHA and prime mortgages, delinquencies have fallen for VA-backed loans.

During the easy mortgage money mania that led to the housing market crash, VA-backed loans with no down payment lost favor with home-buying veterans who needed larger loans for more expensive houses than the VA would approve, or were tempted by teaser loans and unchecked credit.

Mortgage companies say they've required underwriting and always have had underwriting standards.  They've always required that applicant income and credit be documented.  They've made sure that someone getting a VA loan could afford that loan.

That doesn't mean VA loans functioned well during the housing market bubble or mortgage crisis.  Some say that VA loans have basically become irrelevant.  In California last year, there were only 2,000 VA loans according to VA data.  The ceiling on VA loans is $417,000, which, more so before the housing bubble popped, didn't cover many new mortgages in the state.  VA loan rates and fees often were seen as less competitive than other offerings.

As a result, VA-guaranteed loans nationwide fell from a recent peak of nearly 500,000 in 2003 to 133,000 last year.  However, this trend seems to be coming to an end.  Across the country, VA loans are now on the rise.

Rep. Steve Buyer of Indiana has a bill (HR 4539) that would, among a few other things, raise the ceiling for VA-backed loans for refinancing to at least $417,000.

Hopefully in the future Congress will pass a few bills that will allow VA loan specialists the ability to help out more and more veterans.

Visit http://lowvarates.com for more information regarding VA Loans and products.

Website: lowvarates.com