Google Hangout | Quicken Loans and Department of VA

– Good afternoon and welcome to
today’s VA Loan Live Q&A Event, with, The Department of Veterans
Affairs, the National Association of Realtors, and Operation Homefront. I’m
Clayton Closson and I’ll be your moderator for today’s hangout. As the Director
of Content at Quicken Loans, I’ve done a lot of work with VA Loans
over the years, but most importantly, I’m also probably one of the biggest
fans of the VA Loan Benefit. I’ve used my VA loan benefit three times
since I completed my service with the Army. You know, it’s been the tremendous benefit
for me and it saved me a lot of money, and, you know, and I really hope to get
out of this is that our veterans watching can have as much success with
this program as I’ve had. Now, one little bit of housekeeping before we
get started, I just want to mention that we’ll be answering questions live that come
in during the Hangout if we can get to them. You can ask them on the Google
Hangout, on YouTube, on Twitter with the hashtag #VALoanQA, that’s VALoanQA or by
emailing [email protected] All right, before we get to our
questions, what you guys sent in, let’s meet our panel. Our first guest is
the author of “The Military Advantage.” This is a great book and I highly recommend
it for military and veterans who want to learn about all the great benefits
that are available to you, check out this book. Terry Howell of
Terry Howell is a retired Coast Guard Chief Petty Officer and disabled
veteran. Terry earned both his BS and MBA at Corbin University using tuition
assistance and his GI bill benefits to help cover the cost. Welcome, Terry. – Thank you, I appreciate the
opportunity to hang out. – Well, we definitely appreciate you coming
down here to join us in downtown Detroit and I got to tell you, your clearly
somebody who practices what you preach. You’re an expert on benefits for veterans
and military and you used your benefits to pay for your college. You know, have
you ever used your VA Loan Benefit? – Yes, in fact I’ve used it twice. Once
on active duty and once as I was retiring out of the Coast Guard. – That’s great! You know, I actually used
the GI Bill too to go to college and I have used my VA benefits three
times, so I got one up on you. Maybe you can do it one more time.
How’s that sound? Ah, great. Next on our panel we have John Bell from VA.
John Bell III, a Navy veteran and Assistant Director of VA’s Home Loan
Guarantee Program, has worked at the VA for three years and served in senior leadership
positions at large lenders in both origination and servicing divisions
for the past 18 years. Welcome John. – Thank you. – You know, John, I just want to say on
behalf of all the veterans out here, I really thank you and the men and women
of VA for doing all the great work you do. You know, just like Terry, I also
have a service-related disability. I’m 10% disabled and I get a small pension
each month, and I gotta tell you, in 20 plus years, I’ve never missed a pension.
It ‘s never come a day late, and I love that. You know, during my
college years, that paid my grocery. So seriously, thank you for what you do.
I really appreciate it. – We wouldn’t be here except for
the veterans that we serve. So, we’re all here to serve as well. – Great. Thank you, thank you. Next up
we have Margo Willis from the National Association of Realtors. Margo Willis
is a realtor and broker specializing in residential real estate sales for
20 years, serving the Tacoma, Washington and joint base [inaudible] communities.
She was a 2011 National President of the Women’s Council of Realtors
and is a retired US Army 1st Sergeant. Welcome 1st Sergeant Willis, how are you? – Thank you. – Great! When you were in the
Army, did they call you Top? – Sometimes. But I didn’t spin. – Okay. I remember this 1st Sergeant
when I served over in Germany, one of my units. This guy, first of all, was
one of the best leaders I’ve ever known in my life. I only called him Top, you know.
I really think 1st Sergeants are kind of the backbone of the Army. It’s probably
one of the most important positions. So, thank you for your service and like I
said, this guy was a fantastic leader. – You’re welcome. – Thanks. Okay, the second member from our
panel from the National Association for Realtors is Nick Manis. Nick Manis is
the broker/owner of Manis Realtors. He’s located in central New Jersey. He’s
a member of the National Association of Realtors and has earned the GRI and SFR designations.
Nick has been involved in the real estate industry for over eight years
and is co-founder and member of the board of directors of GI Go Fund, a 501C3 non-profit
organization that provides transition assistance to veterans. Welcome Nick! – Thank you, glad to be here. – Great. You know, why don’t you take
thirty seconds to a minute and just talk a little bit about the GI Go Fund. You know,
it sounds interesting and I think perhaps some of our viewers could benefit
from the services you offer. – Well, exactly. They definitely can. It’s
a non-profit organization that provides transition assistance for the men and
women that come back home from war. We help them get connected with the VA.
We help them get registered for their medical treatments and we host
job fairs where they can get, where they can meet the employers face
to face and also universities as well, if that’s the path they choose. In addition,
we help them obviously with housing issues and we also help homeless veterans
get off the street and get back to, you know, working in society and getting
back with their family life and moving forward. – Great, all right! Rounding up our panel
today, we have Sarah Davis from Operation Homefront. Sarah Davis is the Central
Director of the Great Lakes Field Office for Operation Homefront. She’s also a military
wife with firsthand knowledge of the experience of the veteran perspective.
Welcome Sarah! – Thank you, thank you!
It’s great to be here. – Well, thank you for coming. Once again,
could you give us a thirty second to one minute overview of Operation Homefront and
how any of our viewing veterans could benefit from your services? – Sure. Operation Homefront is a non-profit
that provides emergency and morale assistance to military families. If
you go to, you can see all the great things we do. We
have amazing programs that help deployed and wounded service members in all
five branches of the military. – All right! Let’s jump right into our questions.
The first question kind of starts at the top, and I’m going to
start this out directing at you, John, and then I want everybody else to
jump in as you feel they have something to offer, to help inform our veterans. This is a kind of a combination of some
questions, as many of these questions are. We’ve been getting questions over the past
several weeks and we’ve kind of combined them into topics. So this one is really,
what is a VA loan? A brief history of it. When did it start? Why was it created? And
what are the main benefits of VA Loans? So, if you could start us off, John, and
maybe Terry or somebody else jump in and then we’ll go from there. – No problem. Actually, one of my favorite
stories because you have to put yourself back in time. The Service Members Readjustment
Act of 1944 is when this all started, and basically, at that time, all of
construction starts, anything that had to do with housing was basically all related to
the war, and so Congress had to find a way when, having service members come back home,
how do we reinvigorate the economy and start housing again. And so it started way back then.
It’s amazing when you go back and your read the legislative history
of the VA and where we have come from. I’ll tell you what, there’s some pretty
smart people back there because the basic tenets of the program still remain. So, the
mission has always been to help veterans and service members obtain, retain, and
adapt a home and will always be the key cornerstone of the program. – Great. What are the main benefits? – The main benefits of the program?
No down payment, no PMI, mortgage insurance, flexible underwriting
guidelines, and what I mean by that is the VA has prided itself, or has a proud history
of looking at the entire loan package, not just a FICO score, not just a debt
ratio but the overall loan package of, or the loan characteristics of that veteran,
to see, to make sure not only can the veteran get in the home at that particular
time but can maintain that home over 20, 30, 40 years. Also negotiable interest rates.
We allow the market to dictate that. We have assumable loans, which I think
we’ll probably see that service kind of increase maybe as we move forward
over the next two or three years, and then our VA servicing guidance and monitoring.
Those people that we have, those loan guarantee employees that
we have that are there to help, to make sure that, you know, veterans can
stay in their homes and can work with the servicers and answer any questions that
they have if they run into issues. – All right, great! Does anybody else on
the panel wanna jump in on this at all or should I move to the next question? – [Margo] I’d like to make comment about that. And John certainly articulated great the
benefits and when I’m talking to veterans and I’ve worked with a number of veterans,
retirees, the key is that zero down. The down payment, where any other program
they’re looking at possibly three and a half percent or up to five percent or more.
And so that is one of the greatest benefits when you think about the VA Loan. – Continuing on, this probably goes
back to you, John to start it off. What role does the VA play in a VA loan?
This once again is a combination of questions. You know, the real gist of
this was does the VA review VA loans for service people, you know, as a service to
the veterans and to make sure that costs, expenses and rates are what they should be?
Is that what the VA does? – So, we’ll start back at the beginning.
VA guarantees a loan in order to entice lenders to offer the home loan benefit to veterans.
The lender finances the loan, maintains the ability to impose any
additional credit requirements in order to protect the investment but VA does review
a percentage of all loans to ensure that lenders are in compliance with VA
rules, requirements and regulations. One of those regulations, of course, would
be regulating costs and fees that are attributable to veterans. – Great. Okay, let me ask this. If a veteran
feels like something went wrong with the loan and the cost and fees they were
charged weren’t right, what can they do? – They can always call VA and we have staff
and personnel ready to take questions. We actually have eight regional loan
centers across the country that handle questions and do just that. We also
monitor compliance, like I said. Lenders nationally, and we actually
have a lot of changes coming, too. Enhancements that will create
efficiencies for us to do even an enhanced monitoring of those services. – Great. So it sounds like, if that case
comes up, they should start with going to the regional center, find that information
online and then go from there and start the investigation if they really
feel like something isn’t right. – That’s actually correct. – Okay, you know, kind of closing up this
initial form of questions which are very specific to the VA is what changes is the
VA going to make to improve the VA loan process? Is there anything big coming up
soon that veterans should know about? – So, you’re starting something that’s
near and dear to my heart and that is our enhancements that we’re making with our automation.
And what we’re doing is, how do we, VA, protect the veterans and
make the experience as transparent as possible? We want a veteran, when
they go and they apply for a loan, no matter what lender they choose, to have
the same type of experience across the board. The only way to do that is to
understand what variances are out there and to make sure that we understand how to
help them navigate that process. So one thing that we’re doing is enhancing
our data, our ability to acquire data elements so that we can understand not only
the loan on an individual basis but can understand trends and then also understand
when we make policy decisions whether or not those policy decisions are effective
or ineffective and can quickly maneuver to change those if need be. – The last question was kind of, it’s
about eligibility and this was several questions that came in but basically what
people are asking is how do I know if I qualify for VA loan? Reserves, are there
different requirements for reserves, for Coast Guard, for active duty? How
long do you have serve and is there a difference between a disabled veteran and
a non-disabled veteran for eligibility? So what is the main overview
of who qualifies for VA loan? – So, I guess I’ll start out with that question.
I’m sure there will be others that will follow. So if we’re talking
about just eligibility requirements, the main requirement is, in most cases,
with active duty, the requirement’s two years of service, 90 days concurrently on active duty.
If you’re in the reserves, you’re talking about six years, unless
you’re activated under the Title Ten provision, which would be ninety days. My
advice, if you have any questions about eligibility, we have a website,
our e-benefits website, which is, and you’re
gonna hear that a lot from me, you know, during this hour because that is
really where we are trying to drive all veterans to go because it gives you one
platform to be able to access your benefit information, whether or not, not just
loan guarantee but compensation, education, you know, all those benefits
are right there available to you. – Okay, so that’s – That is correct. – Okay. So the second part of the
question was, a person asked, you know, I’m a disabled veteran.
Does this change how I get my loan? Is there any difference
in qualifying for a loan? Between a non-disabled veteran? – There should be no difference as
far as eligibility is concerned. You know, you would, like I said I’m always
going to, the first stop is we would like for you to go on the ebenefits
website and try there first. – Okay. Following up on this, the funding
fee has come up in several questions and people don’t really understand what it is,
so why does the VA has this funding fee and how, people have heard it can be
waived. What are the instances where you could waive the VA funding fee? – So, funding fee is a requirement established
by Congress that helps us provide the VA home loan guarantee program. The
program is self-funded. Right now, 34% of all veterans are exempt
from paying that funding fee. How you would become exempt is if you
are in receipt of VA compensation, the fee would be waived. It is important
to note that the funding fee is able to be rolled into the loan amount. – Is the funding fee always rolled into loan?
Or is it the choice of the veteran? – Choice of the veteran. – So, Terry, you had your funding fee
waived both times when you got a loan? – Oh not. I can’t remember the
first time but the second time, yes, because I was, by that time I was
disabled, so that qualifies for the waiver. – And it saved you several
thousand dollars? – Yes. – That is pretty good. This next question
is about inspection and appraisals. – [Margo] Can I go back to that last question? – Yeah, sorry. Go ahead, Margo. – I just want to mention John certainly
mentioned that, as a disabled veteran, that you would have the same criteria.
However, in your state, when you’re talking to your realtor, you
will find out about additional monies that may be available. For instance, Washington
State Housing Finance Commission has monies that are available to disabled
veteran, as well as a program for veterans that will help with their closing cost
or other costs that are associated with purchasing a home. So, even though you have
the loan, there may be additional monies out there and talking to that realtor and
your lender will help you to find out about that within your State. – Great. – And if I could just join in, I’d say that
there are a lot of state benefits that people aren’t aware of when it comes
to home loan process. Oregon, just south, where I’m from, of where Margo
it, they have actually have a VA loan, state VA loan program, unlike the VA, the
federal VA just guarantees the loan, the Oregon state program actually loans
the money directly from the state. There’s a lot of other parameters,
of course, to go along with it. So each state has different programs and
it’s worth the veteran’s time to take advantage of going back to their state and
seeing how that compares to the federal program. – Right. Yeah. Sounds like a take away from
this it to mention to your realtor when your buying a home that you are military
disabled and therefore you could be eligible for benefits. Bring that up, in other words.
Is that correct Margo and Nick? They should let you
guys know that, correct? – Well, definitely. I think there’s a lot
of things a realtor should know that can benefit the veterans because sometimes,
you know, you can miss things. So it’s difficult to be up to date with
all of the VA eligibilities and the like when it comes to disabled veteran
and even veterans in general. – Okay, great! I’m going to move on to
the questions about inspections and appraisals. And, once again, why do we have
these special inspections for VA loans and why is there a different appraisal? And
here’s one specific question that came in, it was interesting. We can use this
for people to answer and how it kind of affects realtors or Terry, if you have any
information, just jump in but this is it. I got a VA loan in 1997 and I’m refinancing now.
The VA appraiser says I have to have a barrier installed at the end
of my driveway for safety reasons. My question is why do I have to do that? – So I guess I’ll start our with this. I
wanna go back to the reason why we have minimum property requirements first and
then we’ll get into the specifics of that question. Ah, so, you know, VA has, in one
of its pillars of the program itself, is to protect veterans, to make sure that
the veteran, when they move into a home, we want to make sure that it’s safe,
sound and sanitary. And in doing that, we’ve established minimum property requirements,
you know, that we want to make sure that there’s not gonna be a leak a
week after, a week after you move in, sorry. So there are certain things that
we do require, but that’s a protection. And to be honest with you, one of the
things that you should look for is, in that protection, that, you know, we
want to take that worry out from you, our from your, from moving forward. So,
the important thing to remember as far as waivers or anything like that, when you’re
talking about this barrier on the one instance, there are always waivers
that you can ask for minimum property requirements, especially when
you’re doing your refinancing. That’s important to know, to talk to the
VA and to understand what those are, when you’re eligible to do that. But
when you’re talking about a purchase or origination, you know, the main part of the
process though is not any different than any other appraisal process that you would
go through in, using another financing vehicle. So make sure that, that’s one of
the things that I wanted to stress is that when you’re ordering an appraisal, whether
or not it’s VA or whether or not it’s any other process, the timeliness of that
appraisal, the process of ordering that appraisal, is pretty much the same. The
difference is the protections that are afforded by the minimum
property requirements. – And I agree with that. I think these
requirements with the appraisal and the inspection, I think is a positive. I don’t
think it’s a negative because the last thing you want is a veteran in a home and
then some situation arises and it’s not exactly what they thought it was and then,
you know, financial issues come up or the house leaks, like John said. I think these
should be marketed as positive that are there to protect the veteran and that’s why
it’s such a great and solid loan that, once it is approved, the veteran knows he
or she has a great home and they can build a family. – And I agree with that. Certainly
it doesn’t matter what type of loan, when I’m working with a home buyer, I always
council them and explain to them about the importance of having a home inspection
and what the appraisal really is because you want them to have peace of mind
when they’re moving into the home. We never know when our veterans are gonna
be deployed or what may come up but again, it goes back to what John started out with,
protecting that veteran and that future homeowner. – Especially the way the market
has been the past five years. Obviously now it’s on a recovery stage but,
especially with all these issues where a lot of people couldn’t make the
payments, had they been on other loans, it would have been a much different situation.
So the veteran is extra protected and that’s always a great thing. – So, I have a quick question for
the rest of you in the panel. The last loan process I went through, the
inspection seemed to be one of the big hang ups, just getting it scheduled and taken care of.
Is that been improved lately as far as getting more inspectors available
or having a streamlined process for that? – I will speak to that. We actually are in
the process of enhancing that part of our automation as well. What we do know
is that the time that it takes, nationally, for an appraiser to
deliver the product is no different. A VA loan is no different than any other loan our there.
The timeliness is the same. What we do know is that we have a day or
two time difference in the review process because we’re reviewing a lot of more data,
especially when you’re talking about minimum property requirements, than the
average loan would. So there’s a day or two lag there. We’re enhancing our systems and
providing our staff review appraisers more tools for them to be able to do that quicker.
So we’re hoping that that’s going to allow us, over the next year
or two years to even further, you know, become more efficient. – So, a quick follow on. For those that
don’t understand the difference between appraiser and the house inspection, can
you kind of tell us more about that? – So, the appraisal is going to look at,
the appraiser is going to look at what value will your home bring? You know,
what is that house worth right now? The inspection’s gonna look even deeper and
look at what are the things that could, that could come up that could cause
you issues, not only now but later. And the one thing that I will say is that
the inspection is not required by VA. But I would suggest, in any home
loan purchase that you have, that you look seriously
into a home inspection. – Yeah, I mean I agree with that. Everybody
should get a home inspection when they buy a house across the board. Regarding the
VA inspections, like the pest inspection and the well inspection, I actually, I
have a well in my home and I had to get a well inspection and to be honest with you,
I was kind of happy that the VA required it. You know, I have a daughter
at home who is 16 months old and, you know, I really do want to
know the drinking water is safe. I’m not sure I would have done that inspection
if the VA hadn’t asked me to do that so, to me., it’s a protection. I really like that.
Same with the pest inspection. You know. I don’t know if I would have
thought to have my house checked for termites. Thankfully, there were no termites,
but I think it’s really a good thing. So I don’t consider that a hindrance at all.
I consider that a plus, you know. It’s like, hey, these are the
things you really should do to make sure your home is in great shape,
and safe and healthy. – The inspection’s just that peace of mind
that you need when you buy a home that you’re buying a worthy product and that you
can be there for a long time without it, you know, hurting your
pocket every other month. – Okay. We have a question that came in just now.
This is interesting. This is about assumable mortgages.
So, what is an assumable mortgage? Does that mean if I don’t ever use my VA
loan, my children can use my benefit? – I think when we talk about assumable
mortgage in the context that we mentioned earlier, we’re talking about when you
own a home, you have a VA home loan, another veteran is going to come
and take over that, you know, that mortgage. It is important to note that
that veteran would have to requalify and there is a process of that but that’s
the assumable part of the thing. The panel, do you want to
weigh in on that as well? – [Margo] The only thing
I was going to say– – Anybody can assume it. It
doesn’t have to be… I’m sorry. Anyone can assume it. It’s just you have
to go through that qualification phase. – [Margo] Right. – Sorry. – Right. And one thing that I
want to add is that in the past, it was required to have the VA, it was
not required for the VA or the lender to necessarily buy off on the assumption,
and, from what I understand, since 1990, I believe it is, it’s a requirement
now that both the VA and the lender have to agree to the assumption and it’s
real important for the veteran to make sure that they are released from the responsibility
of the loan when the assumption’s taken. You’ll have to correct
me if I’m wrong on that. – [John] That’s quite correct. – Okay. This one is about the pluses and
minuses of buying a home with the VA loan. So there was several questions that came
in and it’s basically does using a VA loan to buy a home make me a more or less
attractive buyer in today’s market? So let’s start this discussion.
This is going to be a good one. – [Margo] Nick, do you want to start off? – Sure. In my region, and I expect
across the country, I would say, you know, in order to market a VA loan
better, I think is what’s needed because it is a strong product but a lot of realtors
and sellers, they aren’t used to it, at least in my area, and you know,
if we have three offers coming in, one being cash, another being conventional
and the third being a VA loan, assuming all are similar, where the prices
are the same, I would say obviously the cash would go first for a seller, but then
second would be conventional because the realtor or the seller is more used to
the 20% or 30% down, looking at that, looking at that and assuming that’s a
stronger loan, then seeing a 0% down VA loan, which obviously is not the case.
I think, you know, over time, I think it’ll start becoming marketed more
correctly, where it will become something that would be highly, a much better
product for sellers to accept. And also this is where the inspections
and the appraisal come into play. In my region, the data, the appraisal data
is six moths behind and prices are kind of sky rocketing, at least in certain areas,
and, you know, when you go in there and get the appraisal it doesn’t show what
today’s market is. It shows what the six months data is, so veterans are getting beat
out on the cash deals and the 20 to 30% down because the appraisal always comes low.
So, at this point, that what the situation is. My advice to
a veteran is hang in there and don’t put all your eggs in one house, in one basket.
Just keep moving on to other ones, have several options that you can go to.
Eventually you’ll buy that house that is meant to be for you. But in the meantime,
I think it is important for us as a realtor community, and also as a nation of
sellers, that we understand more what the VA loan is about and how secure
and positive of a loan it is. So, in that case, it won’t be discarded
as the third place. It could be, you know, one of those products that
people accept and move forward with. – You know, I’ll jump in. I’ll say
that I went, what you just said, Nick matches my experience about a month
ago in Oregon, as far as same offer, cash versus VA loan and we didn’t even get
to the table and I think that happens, again, for the exact reasons you mentioned.
The part that, the loan before that, the one that I’m currently, in the house
I’m in, I actually got my offer in because it was a VA loan and itt was in 2003 when
the [inaudible] was higher or whatever it may be. So I think, again, if we remember
at play also that these are veterans. They’ve served and this is part of the
benefit of their service and for some one to discount their loan because it’s not cash
doesn’t mean, just doesn’t seem like it’s the right attitude to take. And my realtor,
he’s a great realtor but it’s the same situation where he is, he’s warned me a
couple of times that I don’t stand much of a chance putting in an offer on a place because
I’m trying to come in with a VA loan. – Well, how much… No, I just want to say,
how much can a human side of the story really play in that? I mean, if you
have a good realtor representing you, can they make that part of the offer, that
look, you’re gonna be helping a veteran and their family. You know, they just
came back from Iraq, Afghanistan, or served somewhere, versus a cash
buyer who’se just an investor, who probably doesn’t care about the house.
Does that mean anything or is that just, is it really about money in most cases? – The one thing I’ll say about that is,
certainly it depends on your area as Nick started off the conversation. Certainly
when you looking at a seller, they’re looking at pretty much the bottom line.
If it’s cash offer and it’s a VA offer, or an FHA, any type of offer
and the cash offer is there, I think, unlike Nick, what I’ve seen is
that the cash offer would be accepted. Now, if all else is equal and
there are offers with financing, I do believe that if a vetran would tell
their story or, I’ve seen cover letters that came in to explain exactly that, you
know, why they fell in love with the house or what they, why they want that house,
then that might be the little edge, that might be the tipping point when there’s
additional, when there’s financing on the table. But when it’s cash, it’s cash.
But what I would also say is, you wanna sit down and you wanna talk to
your realtor because I think you said that and Nick, I think the consensus is that
they can kind of get you prepared for what the market is, whether that offer’s gonna
be competitive or not so competitive. – I’d like to add to that as well. I’ve been
in situations also where the human side of it has come into play and the veteran
did get the house. It’s not always about the dollars and cents. It’s also about
who the seller feels comfortable with. Will it get to closing and do
they somewhat of a connection? Sometimes that one is more important than
an extra $5,000 in the seller’s pocket. – And I have to say, the other point
that I’d like to make about that is, by talking to your realtor, they can give
you a market analysis so you can get a sense of where your pricing is
within the market because sometimes, for the veteran, if that’s the house that
you want, you may go over that price, that list price so you can be competitive
as long as it’s not gonna put you outside of the financing window, and as
long as it’s, in a market analysis, it says is still a good buy. So that’s a
decision that the veteran will make but you sit down and you get the whole picture,
the whole perspective from your realtor. – And I would say that, on other offers,
we’ve done thins like boost the offer a little bit to cover the closing cash requirements, too.
They help make the deal look better for the seller. – You know, I will say from the policy
perspective, we really try to get the word out and to be a little more proactive on
the marketing of our program because I think there is a perception out there
because you’ve got such a low down payment option there that, for some
reason, if you’ve got a VA loan, it may be inferior to another product
but the numbers just don’t lie and, for the last five years, VA had
held the lowest foreclosures, the lowest serious delinquency rate, you
know, of any product out there including, you know, the best prime loan. You know,
it’s all about, from our perspective, what we’re trying to do is to get
the word out, you know, to sellers, to owners of condiminium complexes, the
HOAs and those kinds of things to let it them know that our veterans are great borrowers
and they need to be taken seriously. – And I think that you guys have
been doing a great job because, you know, 650,000 or so per year loans are
being processed now as opposed to much less even five years ago. I don’t know
the exact numbers but I know it’s been a considerable and there’s gonna be more and
more of them now that more veterans are coming back home. – Yeah, over a 50% increase since 2011. – Yeah, and the one thing I wanted to also
interject is that certainly we’ve talked about education in our industry, our
professionals, our realtors and NRA has a class that they’re now disseminating that teaches
working with military veterans and the things that you need to look for and make
sure that you’re looking out for the veteran as well as Washington State has that.
So I think that, slowly but surely, that word
is getting out more and more. – Yeah, and I’d like to say, Margo,
that I took that class at mid-year, at the mid-year meeting, this year. It was
actually the first class to complete that course. It’s Working with Military and Home Buyers.
It was a fantastic course and I think if more and more realtors
across the country do take it, they’ll definitely be, you know, more qualified
to represent veterans and understand the process much, much better. – You know, this is great information
for people, and you know, I asked Margo and Nick if working with a
lender that can actually approve you versus pre-approved. You know, for example, Quicken
Loans has a program called Mortgage First, where you are approved for an
amount that, as long as from the date of approval to the date of the offer,
your finances don’t change, you will be approved. Is something like that good too?
Should veterans kind of look for those from a lender? Is that important? – Absolutely. Anything to speed up the process
and just make it more efficient and a lot smoother is obviously a plus. So
an approval versus a pre-approval, yes, definitely. Absolutely. It’s a
great thing you guys are doing there. – And I agree. I think that’s essential
because, quite often in our marketplace, if you’re looking at certain homes, bank
owned homes, it’s a requirement to have an approval letter, a pre-approval
or an approval letter with that. Not a pre-qualification but it has to be a
letter that says that you’re approved for a certain amount. So I think that’s
essential and before I go out with anyone, I always make sure that they at least have
that pre-approval and that approval would be even better. – Yeah, and I think even at the closing,
that the seller, when you’re presenting the offer and you show that letter that says
my veteran is not just pre-approved, he’s actually approved, I think that’ll
be a lot stronger than maybe some other offers that are presented. – Great! I have one more question follow
up question on this topic and then we’re gonna go to a question that just came in.
This is a question that is how does a veteran have a seller pay closing costs?
Obviously that’s, you know, it’s kind of one of those things that might
make your offer a little less attractive but let’s assuming that you do have an
offer and you know, one of the benefits of the VA loan, is unique to VA loan
and just a few other loan products, is that the seller can cover your closing costs.
So how does that work and is it always or is it a negotiated thing? – It’s definitely negotiated and that’s
where the realtor that you’re working with can sit down and get the full
picture of, along with your lender, exactly where you need to be, how much
room you need, how much funds you need, what you need as far as getting to the
table, so that you can get the offer accepted, approved and then closed.
So, the closing costs, typically, you’ll, quite often for veterans
see a zero zero advertisement, which means, of course, zero down and zero
closing costs, but the zero closing cost is what’s negotiated by the realtor
that they’re working with. Nick? – Yep, I agree with what you said and I
know sometimes it can get up to 4% covered. – Okay. Great. Okay, here’s the
question that came in. John, this might be for you. Maybe Terry or someone.
This is it. Can a VA loan be used for new construction, and what is that process? – So the ability, you know, for
that product is there. I mean, we have the authority. The issue
is always, you know, lenders, and what availability of the program out
there, you know, is able for you to use. So, you know, Margo, do you want to weigh
in on what you see in the market place because I think that’s more of
what everyone wants to hear. – Well, certainly in our marketplace, we
have a lot of new constructions still going up and so usually those are what we call
spec or specification homes that are ready. And so yes, we see veterans. There are
lenders but if you talk about building custom, that’s something totally different, but yes.
Typically a new constructions no problem. – I think it’s probably going to go back to
your question on whether or not you need the financing before the home is complete.
If you ‘re coming in with the financing at the time the home, you know, you have the house built.
Then you come in with your financing, you know, that’s one thing versus
having the financing up front and doing the custom build and that kind of thing.
Two different things. – Okay, here’s another one that came
in that’s an interesting question. This is the question and I’ll
make sure we all understand it. It’s are there fees on a VA loan that a
veteran can’t pay? So in other words, I guess what they’re saying is are there
certain fees that the seller has to pay by law that are unique to VA? – Well, the Commission must be paid by the seller.
The veteran borrower cannot pay that. – And here in Washington, I believe it’s
the escrow fees. There are fees that are non-allowables and they have that in our
contract already, that the veteran will not pay those. – Okay. Anything else, John, on that topic? – We’re about to make a change,
regulatory-wise, to our fees and charges, so right now I’m going to speak.
So it’s gonna be in the next year. You’re gonna see some proposed regulations
where we’re actually hoping to give our buyers, our veterans more power to be
able to negotiate some fees that they currently do not. So right now, that is correct.
Those are the main ones that we see that aren’t unable to be paid but
some of our third party fees that we, you know, for attorney’s fees and those
kind of things that we currently do not allow, we’re looking into that. – Okay, here’s a question about occupancy
and this is basically occupancy requirements for a VA loan and there’s
kind of three little subsections. I’m going to read them all off and you can
kind of answer pieces of each but the first is can I rent my home when
I get a VA loan? In other words, they get a VA loan and then they
want to rent it to somebody else. How soon after buying my home do I have to move in?
So, and is there any kind of waivers if I’m deployed overseas,
if I’m active duty? And then, can I have more than one home or buy
a vacation home with a VA loan? So I have a home and then I want to buy
another home, and I don’t sell the first home. And I believe there’s another question
that was about a person underwater. So how does that works? – So, from the VA perspective, you know,
occupancy of course is one of the pillars of the program. The program was
not instituted for, you know, for investors. We want you to, this
to be the home that you live in. You know, so occupancy is, we need
to have the intent to occupy. We define that within 60 days of loan
closings, of the loan closing start. There are two reasons for exceptions.
One is a specific event in time. The other one is the specific time frame.
So you’re coming off active duty and it’s going to be outside 60 day time frame,
then those would be reasons why you would submit for an exception. – Kind of a related question or situation
to those people who puchased a home with a VA loan and are now in the situation
where they have PCS orders, permanent chage of station and have to depart.
They’re underwater so to speak and can’t necessarily get rid of the house. Other
than finding a renter and dealing with the renters until they can get above water,
are there any programs to help in that particular kind of situation? – Can, does anybody have
anything on that one? – I recommend talk to the lender, call VA.
You know, call us. You know, we’re always there to
help and try to offer solutions. It’s just very difficult, you know, without
knowing specific circumstances on things like that on how to maneuver. – Yeah, I mean from our perspective,
if you have a problem with your loan, of course, call us first and let us know
what’s going on and we’ll try to help but yeah. – One of the main impacts on military
families right now from those kinds of situations is a lot of times they become
GO bastards as they’re referred to. So the person on orders will go ahead and
leave, take the orders and leave the family behind so they maintain the house,
you know, until they can hopefully get in a better situation. So that’s kind
of the genesis of the question, just trying to see if there are any
programs out there. We’re aware of HARP and HARM, or is it, I can’t remember the other one.
HARP and the other program. – HAND. – HAND. – Right. And those kind of programs are out there.
I know the VA has some programs like that but they really don’t, I don’t
think there’s any that addresses this specific situation very closely. – Well, to be honest, it’s, I don’t
know if many people know this, but you know, we’ve been servicing
our constituencies and well, veterans, with those types of programs for years.
That’s what we’ve done, is helped negotiate for veterans to stay
in homes and to continue the path of home ownership. I always say call your local
regional office and we’ll help all we can. – Okay. next question is about the
all powerful DD214 and, we all know, as veterans, that you cannot get a
loan without this piece of paper. So you lost it. It’s happened to me. What do you do?
This person says that I can’t find me DD214. Where do I get a copy? – I’m gonna jump in always and
say ebenefits first. You know, that’s what you’re going to hear from me
the whole hour and I promised you that and I promised you I’m going to deliver, so
I would try there and then I’m sure there are other suggestions
that the panelists may have. – Right. Including, according to the
VA website, there’s a process prior to ebenefits, to have the VA help you with it
but overall, I think all the benefits are tied to this golden ticket, if you
kind of harken back to Willie Wonka. Without that DD214, you lose a lot of benefits.
YOu can’t open doors without it. So the national archives is another avenue to go to.
You can actually go online and fill out the form and go through a
process to get any of your records, including your discharge papers. – Well, will a day come when the DD214
won’t be required and it will just be all some database that a lender or whoever
just types in a social security number, or some number, and it’s right there and
you’re not required to have this piece of paper? Is there anything in the
near future like that planned? – What you’re explaining is kind of the
process that we’re going through now. So yeah, I think the answer to
that, the quick answer is yes, of course and we’re moving
into that type of age. – Okay. Great. I want to talk about a lot
of people who work in VA loans and this is something we’ve written about extensively
on our blog, is the myth of VA loans. A lot of people feel that VA loans
have a lower borrowing limit, they have higher interest rates, they’re
only for one time, which I’ve used it three times, Terry’s used it two times. John,
who many times have you used your VA benefit? – [John] Three times. – Three times. Margo, how many times
have you used your VA benefit? – [Margo] Once. – [John] One time. So, a lot of people
think you just get it one time and you’re done, you know? So and another one
is that there’s no closing costs. So, you know, how do these myths come about
and, other than lenders and the VA kind of writing, which we do on our blog all
the time, we try to dispel these myths, what can we do and how can we shut down
some of these big ones because these just simply aren’t true and we know that. – I think that it’s, again, it’s
education and it’s what you’re doing, the blogs. I think putting the information
out there, making it available not only to the veterans but the professionals, the
realtors, and everyone else so that they all are on the same line and understanding
because a VA loan is a great loan and it can be used multiple times and I
think it’s just about education. – Yeah, I think I agree with Margo in that
it’s education. We need to market to the realtor community. We’ve got to
market it to the country as a whole. Only 1% of the country has served so unless
you either know a vet or a vet was in your family, chances are you don’t know
what vets have been through and go through when they come back home from military service.
When they call a vetran to come home, they, you don’t know what they go
through, so I think education is the way and proper marketing with the correct information
so people can learn the right way the first time. – You know, I will say, I guess I’m biased
of course, but I would say that if you don’t ask about your ability to use your
entitlement, that you’re missing out and, you know, I think, if nothing else, you owe
it to yourself to make a comparison of what the VA loan can do for you
versus any other product out there. But I think you’re gonna find that the
VA product is not only as competitive, it’s probably more competitive
in most situations. – Well, John, is there a simple way for
a person who’s not part of the mortgage industry or doesn’t work at the VA to
understand how to figure out what their entitlement is? Can you go, can I go
to the ebenefits site and see that? – And then you can also call our regional loan centers.
So if you go to our website, the and you go to the links up
at the top, it will show you the regional loan centers, you can call one of those
regional loan centers and they would be happy to help and walk you through that process.
It’s what we do all day and every day. – Okay, because this leads right into our
next question that just came in and I think it’s an entitlement question, but
this person, and we kind of touched on this a second ago, it’s like can I have
more than one VA loan at a time? So is that based on entitlement? I think
this is a situation where you have a house and you want to buy another because you’re
moving and you can’t sell or you want to rent the other? Does the VA allow
that or is that a lender issue? – The VA does allow that. You can have
more than one VA loan at one time. It depends on the amount of entitlement
that you have left after you use your first loan but yes it is available. A lot of times
it happens when you are moving from one area to another area. That other area falls
into what we call the expanded county loan limits, so the loan limits are higher,
the allowable loan limits are higher, so the entitlement is calculated differently.
So, of course I’m going to say ebenefits website or call your local regional
loan center. We’d be happy to answer those questions for you. – Okay. – John, there a quick way to
explain how the entitlement works? I don’t think everybody understands,
you know, what it actually means, using only part of your
entitlement for a loan. – So, you have a basic entitlement,
which is your $36,000 limit, which is tied to the $417,000 loan limit,
which is basically the conventional, or the government limit but there are expanded
limits and those expanded authorities are in areas that are, that are above,
the entitlement goes up 144,000 and above. Is it an easy thing to explain?
Probably not. There is, there are calculations, we do have
calculators out there to help you. I will be honest with you, it is, I wish
we could make it a more simple process, but it isn’t and it all goes by the area
that you live in and the entitlement that you have left. I wish that I could explain
a little better and maybe someone on the panel has a better explanation for it
but we do have tools out there that are available and, as I’ve always said, you
can always go to the website or call us. – Okay. Here’s a question that
I think I know the answer to. This is, I think, a person who’s
in some kind of trouble here, but the VA loan rated me 100% disabled. Why
am I being asked to pay the funding fee? Is there ever a case when a 100% disabled
veteran would have to pay the funding fee? The answer’s no. – Right. The answer is if you are in
receipt of service connected disability, you should not be paying a funding
fee and if you are, call us. – Okay, so they need, is there, is there
a specific place or once again go to the regional center, because
it sounds like this guy– – Regional loan center would… I’m
sorry, I didn’t mean to cut you off, Clayton, but the regional loan
center willl take care of ’em. – Yeah, because, if this is happening,
there’s two things going on. Number one is the lender doesn’t know
they’re disabled or doesn’t know how to properly originate a VA loan or
there’s some kind of fraud going on. So they definitely need to
contact the VA in that case. – And it may just be a simple
mistake in the system. Who knows? But it’s something that you need
to check into and ask about. – Okay. Great. Here’s one, we can
probably start with our realtor friends. Do you see an increase in this market and
in future projected markets of VA loans for buyers? What do you
guys think about that? Nick? – I see, I see an increase now that the
men and women are coming back home and obviously the numbers that John has
explained earlier today has shown that. 650,000. It’s a 50% increase since 2011,
so I’ve definitely seen it in my area. – And in my area, I have to say
that we have two military bases, so we see a lot of VA loans and, as more
and more individuals are returning, certainly we know those numbers will increase
but we see a lot of VA loans now and are anticipating it in the future. – [Clayton] You’re definitely seeing
an increase and I can tell you, on our end we’re seeing an increase on
people applying and being approved for VA loans, too. Here’s a quick
question that is realtor related. I want to follow up with you. Somebody
asked are all agents realtors and, real quick, what is the difference? – Not all agents are realtors. Realtors
is that you’re a part of an association. You’re a member of a trade association and
we have our own bylaws and code of ethics that are held to a very high standard.
You know, being part of the National Association of Realtors, you know,
they have the trade shows every year. You have multiples ones that we go and there’s
education there and you meet a lot of great people out there, a lot of professionals.
So not all agents are realtors. You have to be a part of this,
you have to be a member of this, of the association. – [Margo] And I agree with what Nick just
said and one of the best place to tell if an individual is a realtor, we
use the trademark “R” for our, for our organization, for the National
Association of Realtors and I have to say one of the great things about being realtors
and working with a realtor is that individual has, as Nick said, agreed
to adhere to a code of standards, a code of ethics and a way of doing
business but also understand that they are advocates for home owners and home ownership
and all the benefits that are derived from that. – Okay, well thank you. Listen,
we’re just about out of time. We have time for one last question and then
I’m going to give everybody a chance to wrap up. This is a question that’s interesting to me.
I used a VA loan 40 years ago on my first home. The house was
sold with an assumable loan, so we’re getting back to assumable loans now.
How could I find out if I’m eligible again today? I think it’s probably
John who can answer that question? – I think you’re throwing me another
softball with the ebenefits. – There you go. Well, there you go. We
found that ebenefits is a great site for veterans to go to. I
mean, seriously, right? – Yes. – Okay. Okay. Well, listen, we’re just
about out of time. Does anybody have any final remarks you’s like to
say before we wrap this up? – I just would like to say I think this
Google Hangout this is fantastic idea. I think that promoting, you know, the details
of what veterans go through and about the specifics of the VA loan process, I
think is going to do a fantastic and tremendous change to this, to the
veteran process of buying a home. I think as more sellers across the country
understand more about what veterans go through and what the VA loan is about
and also the realtors as well, I think it’s going to be a huge impact for
this community. They deserve nothing less and I just want to say that this is a
fantastic thing that we did here today. I appreciate being involved. – [Clayton] Thank you. – And I want to echo Nick’s comments and
I also want to say thank you to the panelists as well as to each veteran who’s
out there and their family because it truly is a family affair when you’re serving.
So I just hope that this information will be disseminated to them so that they
can utilize it and I appreciate all that they do for us. – [Clayton] Great. – And I just want to say thanks to
everyone on the panel for this forum. I think that any time we’re talking
about a VA loan it makes me happy. I think, we don’t, as a government
organization, go after market share, but I will tell you this: every time I talk
to a veteran, I ask have you used your home loan benefit? Every time that
someone comes up to me and says hey, what should I do to start the process
and I say, the first thing is, have you talked to your lender and have
you talked to your realtor or your agent? Let them know you’re a veteran.
Ask those questions. You know, you want to at least see whether or
not this option is right for you. I think that you will be pleasantly
surprised and I think that it will, but you know, if not, at least you have the
option to know whether or not it is or not. But thank you. – And I just want to say thanks to the
panelists too ’cause I learned quite a bit and things that I can actually apply as
a veteran and I want to thank all the veterans who are watching today for their service.
Thank you very much from and from all
the people here, thank you. – Yeah, thank you everybody. Thanks
to John, Margo, Nick, Sarah, and of course Terry here. You know, honestly,
same thing. I probably got 10 blog story ideas out of this, so this is
really great for the Quicken Loans blog. Thank you to the beterans and I
just want to remind everybody, I apologize if we didn’t get to your
questions today and we will answer every question you send to us. Please
send any questions to VALoanUnit, once again that’s one word,
[email protected] and if you did send us a question, we will reply to each question
and answer you. Thank you very much everybody, have a great afternoon.
This has been a great hangout. I’ve had a great time. Thank you. ♪ [music] ♪

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