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Released: August 20, 2011

Veterans Affairs mortgage program avoids the pitfalls of other lenders

Source: Kenneth R. Harney, The Washington Post

Imagine a mortgage program that seems to defy many of the lessons of the housing bust: • 91 percent of its borrowers make zero down payments. • Loan amounts go well into the jumbo range — to $1 million and sometimes above, even with little or nothing down. • Credit standards are flexible and generous. Underwriting rules encourage loan officers to look for ways to approve applications rather than to reject them. • Mortgage originations are up — almost triple what they were just three years ago — and are on track this year to exceed 2010’s volume. The rest of the loan industry, by contrast, is down by anywhere from 25 percent to 30 percent. You might assume that any home loan program with come-ons like these must be swimming in bad mortgages, loaded down with serious delinquencies and foreclosures. Yet this one, which gets relatively little attention in the media, has better mortgage performance than FHA and is comparable with some “prime” loan operations that have far more stringent credit rules.

Read Full Article: Veterans Affairs mortgage program avoids the pitfalls of other lenders