Shinseki Says VA's Home Loan Program a "Continued Success"

Veterans More Likely to Avoid Foreclosure with VA-Backed Loan



WASHINGTON (Dec. 7, 2009) - Despite problems in the nation's housing
market, mortgage loans backed by the Department of Veterans Affairs (VA)
had a lower foreclosure rate than any other type of home loan in the
industry, as of the end of the last fiscal year.



"The dedication of VA's loan professionals, the support of our partners
in the mortgage industry and most importantly, the hard work and
sacrifice of our Veterans have made this possible," said Secretary of
Veterans Affairs Eric K. Shinseki.  "VA is making good on its promise to
help Veterans buy homes, and Veterans are achieving their dreams."



Currently, about 1.3 million active home loans were obtained using VA's
Home Loan Guaranty Program.  The program makes home ownership more
affordable for Veterans, active-duty members, and some surviving spouses
by protecting lenders from loss if the borrower fails to repay the loan.




More than 90 percent of VA-guaranteed loans are made without a
downpayment.  Despite this, VA has the lowest serious delinquency rate
in the industry, according to the Mortgage Bankers Association.
Furthermore, VA's percentage of loans in foreclosure is the lowest of
all measured loan types-lower even than prime loans, which require high
credit scores and a 20 percent downpayment by the borrower.



Much of the program's strength stems from the efforts of VA employees
and loan servicers nationwide, whose primary mission is to help Veterans
stay in their homes, avoid foreclosure and protect their credit lines
from the consequences of a foreclosure, Shinseki said.

Depending on the situation, VA's loan specialists can intervene on a
Veteran's behalf to help pursue home-retention options such as repayment
plans, loan modifications and forbearance.  Additionally, under certain
circumstances, VA can refund a loan, which involves purchasing the loan
from the mortgage company and modifying the terms so the Veteran can
afford the new mortgage payment.



Since 1944, when home-loan guarantees were offered under the original GI
Bill, through the fiscal year that ended Sept. 30, VA has guaranteed
more than 18.7 million home loans worth $1.04 trillion.