New Regulations for VA Loan Modifications
New Regulations for VA Loan Modifications
New Regulations for VA Loan Modifications
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March 4, 2011 (Chris Moore)
mortgage-valoans-image
The Department of Veterans Affairs (VA) has issued new regulations regarding loan modifications to existing VA home loans. The new rules are designed to add more flexibility and encourage loan holders to modify more loans.

The VA revised its regulations back in 2008 to give loan servicers more authority in modifying VA loans without prior approval from the federal agency. However, portions of that rule created obstacles and burdens when it came to modifying loans. The new rules were created to address those obstacles.

Previously, interest rates for a VA modified loan was calculated on the Ginnie Mae coupon rate. The new rule changes that and rates will now be based on the conforming 30 year fixed mortgage loan rate released weekly by Freddie Mac. The new maximum interest rate on a modified loan can be no more than 50 basis points above the Freddie Mac rate and is now based on the executed date of the loan modification, rather than the date of approval. The date of execution is the day the loan modification agreement is signed by the borrower.

The previous regulation allowed loan modifications without a limit on the interest rate, now the lender is required to get a prior approval on any VA modification in which the interest rate increases by more than one percent over the existing rate.

If a state housing finance authority holds the loan, the interest rate on the modified loan may now remain the same as the original loan’s interest rate when the law governing the state agency’s program prohibits a change in the interest rate.

The VA also amended the regulation to allow legal fees and foreclosure costs to be capitalized in the modified loan balance along with the items previously allowed such as principal, accrued interest, and deficits in taxes and insurance impound accounts. The advantage of this is that a veteran can now finance all of the costs instead having to make an up-front payment which might have prevented them from being able to get a loan modification.

The most important thing to remember is, don’t wait. These new rules have already taken effect. If you’re a veteran and you’re starting to have problems, contact your lender right away. Veteran loans have more built-in protections than conventional loans but waiting can increase your costs down the road. Get help early and take advantage the benefits you’ve earned.

Tags: VA, loan modifications, new regulations, loan servicers, interest rates, modified loan, Freddie Mac, legal fees, foreclosure costs

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Estimate your monthly mortgage payment
Auto Loan
Calculator

Determine how much car you can afford before buying
Learn About
Mortgage Loans

Learn about the different types of home loans
15 Year vs 30 Year
Loan Comparison

Compare 15 year and 30 year mortgage loans
Todays Mortgage
Rates

See today's mortgage rates. Shop, compare and save.

March 4, 2011 (Chris Moore)
mortgage-valoans-image
The Department of Veterans Affairs (VA) has issued new regulations regarding loan modifications to existing VA home loans. The new rules are designed to add more flexibility and encourage loan holders to modify more loans.

The VA revised its regulations back in 2008 to give loan servicers more authority in modifying VA loans without prior approval from the federal agency. However, portions of that rule created obstacles and burdens when it came to modifying loans. The new rules were created to address those obstacles.

Previously, interest rates for a VA modified loan was calculated on the Ginnie Mae coupon rate. The new rule changes that and rates will now be based on the conforming 30 year fixed mortgage loan rate released weekly by Freddie Mac. The new maximum interest rate on a modified loan can be no more than 50 basis points above the Freddie Mac rate and is now based on the executed date of the loan modification, rather than the date of approval. The date of execution is the day the loan modification agreement is signed by the borrower.

The previous regulation allowed loan modifications without a limit on the interest rate, now the lender is required to get a prior approval on any VA modification in which the interest rate increases by more than one percent over the existing rate.

If a state housing finance authority holds the loan, the interest rate on the modified loan may now remain the same as the original loan’s interest rate when the law governing the state agency’s program prohibits a change in the interest rate.

The VA also amended the regulation to allow legal fees and foreclosure costs to be capitalized in the modified loan balance along with the items previously allowed such as principal, accrued interest, and deficits in taxes and insurance impound accounts. The advantage of this is that a veteran can now finance all of the costs instead having to make an up-front payment which might have prevented them from being able to get a loan modification.

The most important thing to remember is, don’t wait. These new rules have already taken effect. If you’re a veteran and you’re starting to have problems, contact your lender right away. Veteran loans have more built-in protections than conventional loans but waiting can increase your costs down the road. Get help early and take advantage the benefits you’ve earned.

Tags: VA, loan modifications, new regulations, loan servicers, interest rates, modified loan, Freddie Mac, legal fees, foreclosure costs

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

March 4, 2011 (Chris Moore)
mortgage-valoans-image
The Department of Veterans Affairs (VA) has issued new regulations regarding loan modifications to existing VA home loans. The new rules are designed to add more flexibility and encourage loan holders to modify more loans.

The VA revised its regulations back in 2008 to give loan servicers more authority in modifying VA loans without prior approval from the federal agency. However, portions of that rule created obstacles and burdens when it came to modifying loans. The new rules were created to address those obstacles.

Previously, interest rates for a VA modified loan was calculated on the Ginnie Mae coupon rate. The new rule changes that and rates will now be based on the conforming 30 year fixed mortgage loan rate released weekly by Freddie Mac. The new maximum interest rate on a modified loan can be no more than 50 basis points above the Freddie Mac rate and is now based on the executed date of the loan modification, rather than the date of approval. The date of execution is the day the loan modification agreement is signed by the borrower.

The previous regulation allowed loan modifications without a limit on the interest rate, now the lender is required to get a prior approval on any VA modification in which the interest rate increases by more than one percent over the existing rate.

If a state housing finance authority holds the loan, the interest rate on the modified loan may now remain the same as the original loan’s interest rate when the law governing the state agency’s program prohibits a change in the interest rate.

The VA also amended the regulation to allow legal fees and foreclosure costs to be capitalized in the modified loan balance along with the items previously allowed such as principal, accrued interest, and deficits in taxes and insurance impound accounts. The advantage of this is that a veteran can now finance all of the costs instead having to make an up-front payment which might have prevented them from being able to get a loan modification.

The most important thing to remember is, don’t wait. These new rules have already taken effect. If you’re a veteran and you’re starting to have problems, contact your lender right away. Veteran loans have more built-in protections than conventional loans but waiting can increase your costs down the road. Get help early and take advantage the benefits you’ve earned.

Tags: VA, loan modifications, new regulations, loan servicers, interest rates, modified loan, Freddie Mac, legal fees, foreclosure costs

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.