Tag: foreclosure

VA Compromise Sale: What Veterans Need to Know Before Foreclosure

Posted by Atlas Home Group on

If you have a VA home loan and are struggling to make your mortgage payments, you may have more options than you realize. One of the most important is a VA Compromise Sale, which is the Department of Veterans Affairs’ version of a short sale.

For many veterans, a VA Compromise Sale can provide a path to avoid foreclosure while resolving a mortgage that has become unaffordable.

Here’s what you need to know.

What Is a VA Compromise Sale?

A VA Compromise Sale allows a homeowner to sell their property for less than the amount owed on the mortgage when the home’s market value is no longer enough to pay off the loan in full.

Unlike a traditional home sale, the lender and the VA must approve the transaction because they are agreeing to accept less than the full payoff amount.

The goal is simple: help the homeowner avoid foreclosure while minimizing the financial loss for everyone involved.

Who Qualifies?

A VA Compromise Sale may be an option if:

  • You have a VA-backed home loan.
  • You’re experiencing a financial hardship.
  • You’re behind on your mortgage or are likely to fall behind.
  • The home’s market value is less than what you owe.
  • You have a legitimate reason you can no longer afford or keep the property.

Every situation is different, so eligibility is reviewed individually.

What Is Considered a Financial Hardship?

Common hardships include:

  • Job loss or reduced income
  • Divorce or separation
  • Medical issues
  • Military relocation or PCS orders
  • Death of a spouse
  • Significant unexpected expenses
  • Other circumstances that make the mortgage unaffordable

The hardship must be documented as part of the approval process.

How Is a VA Compromise Sale Different from a Traditional Short Sale?

While both involve selling a home for less than the mortgage balance, VA loans have additional guidelines established by the Department of Veterans Affairs.

The VA reviews the transaction to determine whether approving the sale is the best alternative to foreclosure.

Because of these additional requirements, it’s important to work with professionals who understand the VA process and can coordinate with the lender, the VA, and all parties involved.

Will I Still Owe Money After the Sale?

This is one of the biggest questions homeowners ask.

The answer depends on several factors, including the terms of the approval from the lender and the VA.

Every approval is unique. Before closing, it’s important to understand exactly what the approval letter says regarding any remaining balance or obligations.

Never assume that every VA Compromise Sale is handled the same way.

Will This Affect My VA Loan Benefit?

Many veterans are concerned they’ll permanently lose their VA loan benefit.

In many cases, veterans can restore or reuse their VA loan eligibility in the future, although it depends on individual circumstances and the amount of entitlement used.

Because every situation is different, it’s important to discuss your long-term goals before deciding on the best option.

What Is the Process?

Although every case is different, a typical VA Compromise Sale follows these steps:

  1. Review your financial situation.
  2. Determine whether a VA Compromise Sale is appropriate.
  3. List the home for sale.
  4. Accept an offer from a qualified buyer.
  5. Submit the complete package to the lender and the VA.
  6. The lender and VA review the request.
  7. Once approved, the transaction moves to closing.

The approval process can take time, but having a complete file and experienced representation often helps avoid unnecessary delays.

Why Experience Matters

A VA Compromise Sale involves much more than simply listing a home.

It requires careful documentation, communication with the lender, coordination with the Department of Veterans Affairs, and management of the transaction from contract through closing.

Missing documents, incomplete hardship information, or delays in communication can slow the process significantly.

Working with a team that specializes in short sales can help make the process as smooth as possible.

Frequently Asked Questions

Can I sell my VA home if I’m not behind on payments?

Possibly. If you’re experiencing a documented hardship and foreclosure appears likely, you may still qualify. Each case is evaluated individually.

Do I need cash to complete a VA Compromise Sale?

Many homeowners do not need to bring funds to closing, but every approval is different.

Can I stay in my home during the process?

Yes. Most homeowners remain in the property until closing.

Is foreclosure always avoidable?

Not always, but acting early gives you the most options. Waiting until the foreclosure process is well underway can limit available solutions.

We Can Help

If you’re worried about your VA mortgage, don’t wait until foreclosure is around the corner.

The sooner you explore your options, the more opportunities you may have to protect your finances and move forward.

At Atlas Home Group, we specialize in helping Maryland homeowners navigate complex short sales, including VA Compromise Sales. We’ll review your situation, explain your options in plain English, and help you determine the best path forward.

Have questions? Contact Atlas Home Group for a confidential consultation.

Moratorium on Foreclosures Ends Soon, the Time to Seek Relief is Now

Posted by Atlas Home Group on

Homeowners have endured a whirlwind of emotions over the past 12 months. From the lows felt when the virus first took hold to the temporary relief when the CARES Act was passed, one constant through it all has been a sense of uncertainty. Luckily, homeowners struggling to pay their mortgage each month have a source of support—but as of January 31, 2021, that assistance may no longer be an option.

What Happens on January 31?

On January 31, 2021, mortgage lenders can begin to initiate foreclosure proceedings on defaulted loans. Currently, there is a moratorium on single-family foreclosures, which was extended on 12/2/2020. So, no matter how many payments you may have missed recently, your lender was unable to initiate a foreclosure. That all changes on January 31.

An important exception to note is that if you had a foreclosure in process on April 3, 2020, your foreclosure might proceed at any time—so do not wait to take action.

What Does This Mean for Me?

You must act quickly to avoid a foreclosure if you have missed multiple payments. If your lender is unwilling to extend the forbearance, arrangements need to be made to bring payments current quickly.

What Is a Mortgage Forbearance Plan?

A forbearance agreement is between a borrower and a loan servicer that suspends or reduces mortgage payments for a period of time. One of the critical benefits of forbearance for a homeowner is that the loan servicer cannot initiate a foreclosure during this time.

While homeowners receive relief from their monthly mortgage payment, the relief is only temporary, and the payments must still be paid in full. Speak with your mortgage provider for the specific details of your forbearance agreement.

Key points to remember with a forbearance:

  • The total amount you owe does not decrease
  • Interest continues to accrue on skipped payments
  • The forbearance period is temporary

Differences in Forbearance Rules

The terms of your forbearance agreement can vary depending on the type of mortgage you have and who your lender is. Some of the variables can include:

  • How long the forbearance period lasts
  • What, if anything, is due during the forbearance period
  • How the skipped or lowered payments will be repaid once the forbearance period ends

Once the forbearance period ends, the lender is expecting payment to begin as agreed. If you are still facing financial hardship when the forbearance period ends, your lender may offer you a modification agreement.  If a modification is declined, the lender is then able to begin foreclosure proceedings.  An avenue to avoid a foreclosure is to consider selling your home. 

Short Sale or Quick sale

If selling your home becomes the best option to avoid foreclosure and the lingering impacts, a short sale (home is valued at less than is owed) or a quick sale (there is equity in the home however it needs to be sold quickly) are options to consider. 

In both cases, these sales require special expertise to be handled properly and quickly. Contact us for a confidential conversation to learn more about available options before it is too late.  We have specialized in sales like these since 2008.