VA Foreclosure Homes - VA Loans

VA foreclosure homes represent a unique opportunity for both home buyers and investors to purchase real estate at a substantial discount. These are homes which have been foreclosed on by the Department of Veterans Affairs. They were last owned by United States veterans who used their VA entitlements to purchase the properties. VA-secured loans are guaranteed by the federal government. In all home loans secured by the Department of Veterans Affairs, the lender is refunded all lost money in the event of a foreclosure.

There are a number of advantages in buying VA foreclosures. For instance, the VA will pay the closing costs. This can amount to a savings of up to six percent of the value of the purchase. You can save even more money because Private Mortgage Insurance (PMI) is not required. You could even get the property with no down payment. And because discounts can range from 10- to 50% of market value, VA foreclosures can provide their buyers with instant equity.

Another big advantage of buying VA-foreclosed homes is that the VA will provide financing for some of them. It’s called VA Vendee Financing and is available to both veterans and non-veterans. The VA will not, however, make any repairs. All VA home foreclosures are sold in “As-Is” condition.

VA home foreclosure property management is handled by Ocwen Loan Servicing, a branch of Orlando, Florida-based Ocwen Federal Bank. It is Ocwen’s responsibility to prepare the VA-foreclosed homes for market and then marketing them.

The process of buying a VA foreclosure is similar to that of buying any other bank foreclosure, with one exception. Ocwen has a waiting period for new listings of VA homes for sale which it calls a Simultaneous Offer Period. It’s defined by Ocwen as “the minimum competitive listing period for receipt of offers to purchase VA foreclosures”. It’s also used for listings with price changes. All offers received during the Simultaneous Offer Period are considered to have been received simultaneously. The Offer Period usually runs for ten days after the property is listed.

At the close of the Simultaneous Offer Period, Ocwen evaluates all offers received on a VA foreclosure home to determine if any of them meets the minimum criteria established by the VA for acceptance. If the minimum criteria have not been met by any offer, Ocwen will relist the property for sale, and the procedure begins again .

All VA foreclosures are listed on the local Multiple Listing Service by local real estate agents. Making an offer on VA foreclosed homes is similar to making an offer on a seller-owner property. Offers for the property are made to the listing agent. A $500 earnest money deposit is required on all offers. The listing agent then submits the offer to a representative of Ocwen.

If an offer is not accepted on a VA-foreclosed property for sale, VA will counter-offer just as a seller would do. The process of getting an accepted agreement can, however, be slower than the normal buyer-seller transaction.

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