VA Foreclosure Homes

 

VA home loan foreclosures represent a unique opportunity for both home buyers and investors to purchase real estate at a substantial discount. These are VA loan foreclosures have been foreclosed on by the Department of Veterans Affairs. They were last owned by a United States veteran who used their VA loan entitlements to purchase the properties.   

There are a number of advantages in buying VA loan foreclosure. For instance, the VA will sometimes pay the closing costs or provide a credit for closing costs.  This can amount to a savings of up to six percent of the value of the purchase. You can save even more money because Private Mortgage Insurance ( PMI ) is not required for a new VA home loan. You could even get the property with no down payment.    Because VA loan foreclosure discounts can range from 10- to 50% of market value, VA home foreclosures can provide their buyers with instant equity.

Another big advantage of buying VA foreclosed homes is that the VA may provide financing for some of them.  It’s called VA Vendee Financing and is available to both veterans and non-veterans. The VA will not, however, make any repairs. All VA home foreclosures are sold in “As-Is” condition.

VA loan foreclosure property management is currently handled by Ocwen Loan Servicing, a branch of Orlando, Florida-based Ocwen Federal Bank. It is Ocwen’s responsibility to prepare the VA foreclosed homes for market and then marketing them.

The process of buying a VA foreclosure is similar to that of buying any other bank foreclosure, with one exception. Ocwen has a waiting period for new listings of VA homes for sale which it calls a Simultaneous Offer Period. It’s defined by Ocwen as “the minimum competitive listing period for receipt of offers to purchase VA foreclosures”. It’s also used for listings with price changes. All offers received during the Simultaneous Offer Period are considered to have been received simultaneously. The Offer Period usually runs for ten days after the property is listed.

At the close of the Simultaneous Offer Period, Ocwen evaluates all offers received on a VA home loan foreclosure to determine if any of them meets the minimum criteria established by the VA for acceptance. If the minimum criteria have not been met by any offer, Ocwen will relist the property for sale, and the procedure begins again.

All VA foreclosures are listed on the local Multiple Listing Service by local real estate agents. Making an offer on VA foreclosure is similar to making an offer on a seller-owner property.  It is best to use a Realtor in these situations as VA has already agreed to pay the commissions and it won’t save you any money.

Many times VA will counter your offer.  Some of this might be for technical reasons and other may be that you are close on terms to what they will accept.  Again, when buying a VA home loan foreclosure a good Realtor will be a plus.