VA Loan Powers of Attorney Part 2

 

Deciphering the VA Lender’s Handbook Chapter 9 Part 8

VA Power of Attorney

In the last article we covered how a veteran can use an attorney-in-fact to execute a VA loan on his or her behalf. This makes getting a VA loan feasible for active-duty servicemembers who are stationed overseas to use their VA loan benefits at a time that works best for them, rather than having to wait until they return home. This also allows other veterans who feel they are too busy or would rather have a family member or friend work through the details on their VA loan to do so. At the end of the last article, we touched on the last thing a lender must do to make sure that the veteran is on board with both the VA loan and the person acting as the attorney-in-fact: verify that the veteran is not MIA if he or she is on active duty. The lender must sign the following certificate and submit it to the VA with the rest of the loan packet:

 

“The undersigned lender certifies that written evidence in the form of correspondence from the veteran or, if on active military duty, statement of his or her commanding officer (including statement of person authorized to act for said officer), affirmatively indicating that the veteran was alive and, if the veteran is on active military duty, not missing in action status on (date), was examined by the undersigned and that the said date is subsequent to the date the note and security instruments were executed on the veteran’s behalf by the attorney-in-fact.”

 

Even if the veteran is not on active duty, the lender is still required to verify that the veteran is still alive before making the VA loan. In the event that the veteran is on active duty and the lender is having trouble obtaining verification that the veteran is alive and not MIA, the VA may assist the veteran in obtaining verification. You as the borrower should know that your VA loan cannot be closed until final verification is received from you, so do your best to make yourself available with the limited amount of control you have when stationed overseas. Remember, that even if the loan is closed, if insufficient verification was provided, the VA can deny guaranty on the loan, causing major problems for both the lender and you as the borrower.

 

Hopefully, borrowers will understand why lenders will be unwilling to close on the loan until sufficient verification is obtained, because lenders can be extremely insistent on obtaining that verification and borrowers who don’t understand why can grow frustrated or annoyed at the persistent hagglings of their lender. To drive the point home, here’s a paragraph from the Handbook: “VA will issue a Certificate of Commitment only if the veteran has executed a valid and legally adequate power of attorney and consented to the specific transaction (as described under the “Requirement” heading). If VA has information that the veteran is MIA or deceased, VA will not issue a commitment.”

 

VA Loan FundingIn other words, if the lender doesn’t get sufficient verification before the loan closes, the VA will not guaranty the loan, making the loan as risky as a conventional loan for the lender, and even more so since the down payment made on the VA loan was probably significantly less than 20%. Now, there is the possibility for the VA to make a hardship exception if the proper verification is extremely difficult to obtain, but that is something your lender will work with the VA on only after trying very hard to get the verification from you.

 

In most cases, getting this final verification is not a big deal; it’s fairly simple and straightforward, and most veterans who use attorneys-in-fact do not have trouble with this portion. Remember though, that the verification is not optional, and the easier you can make it on the lender, the easier it will be on you as well.

 

VA Loan Powers of Attorney Part 1

 

Deciphering the VA Lender’s Handbook Chapter 9 Part 7

Power of Attorney

For active-duty servicemembers stationed away from where they are wanting to live, or for any other veterans who would feel more comfortable having a savvy son or daughter arrange the details of their home loan, being able to give someone power of attorney to apply for and close on their home loan can be a great boon. The VA’s official policy is that a veteran is allowed to use an attorney-in-fact (someone acting as the veteran’s attorney, even if they are not a licensed attorney) to sign any documents necessary to getting a VA loan. From the Handbook: “VA will allow a veteran to use an attorney-in-fact to execute any documents necessary to obtain a VA-guaranteed loan. This enables active duty servicepersons stationed overseas, and other veterans who cannot be present to execute loan documents, to obtain VA loans.”

 

That’s far from the end of the story, however. The manner in which the veteran has granted the power of attorney to the individual must be valid and “legally adequate”. Whether the veteran grants general or specific power of attorney, they need to make sure that the manner in which it was granted complies with state law enough that the mortgage can be legally enforced in that jurisdiction and a clear title can be conveyed in the event of a foreclosure. As long as the power of attorney has been legally granted, the attorney-in-fact can apply for a Certificate of Eligibility on behalf of the veteran and initiate the loan processing on their behalf as well. The VA allows for the entire loan process to be done by an attorney-in-fact if the veteran desires it. However, the VA does have some requirements to make sure that the veteran is 100% aware of what he or she is being agreed to.

 

The VA requires that some form of written consent by the veteran be provided when using an attorney-in-fact. The reason for this is that there are specifics about the VA loan program that it is important to make sure the veteran understands that he or she may not learn except through the VA loan application process. This requirement can be satisfied one of two ways. Here is what the Handbook outlines as the two possibilities:

  • the veteran’s signature on both the sales contract and the Uniform Residential Loan Application, as long as the veteran’s intention to obtain a VA loan on the particular property is expressed somewhere in those documents, or
  • a specific power of attorney or other document(s) signed by the veteran, which encompasses the following elements:
    • Entitlement– A clear intention to use all or a specified amount of entitlement.
    • Purpose– A clear intention to obtain a loan for purchase, construction, repair, alteration, improvement, or refinancing.
    • Property Identification– Identification of the specific property
    • Price and Terms– The sales price, if applicable, and other relevant terms of the transaction.
    • Occupancy– The veteran’s intention to use the property as a home to be occupied by the veteran (or other applicable VA occupancy requirement).

 

Once one of those two requirements are filled, the attorney-in-fact is able to conduct the loan application process without any involvement from the veteran. However, at loan closing the lender has to verify that the veteran is alive, and if he or she is on active duty, verify that they are not currently MIA. This is to protect a veteran’s entitlement being used fraudulently without the veteran’s knowledge. We’ll elaborate on that requirement as well as outline the rest of the requirements for using an attorney-in-fact in the next article. As you can tell, most of these requirements are to reassure the lender and the VA that the person acting as your attorney-in-fact really has your permission to do so. These requirements protect you from having a stranger pose as your attorney-in-fact without your knowledge. Obviously, if you have selected someone you trust to be your attorney-in-fact, fulfilling these requirements is just a formality but they are there for your protection and the protection of the integrity of the VA loan program.

 

Check out the following article for the rest of the story on powers of attorney and feel free to give us a call at Low VA Rates if you have any questions.

 

VA Home Mortgage Program is for You!

It is a common human behavior to learn of a program or a potential benefit and to assume that the program or benefit is meant for others. The truth is, thousands of veterans and their families are eligible for low-interest veterans mortgage home loans and have yet to take advantage of the offer.

In 1944, the U.S. government created a military loan guaranty program to help returning service members purchase homes. Post WWII, it was not uncommon to see entire subdivisions rise up from the ground to be filled largely with veterans returning home from the war and starting on the next phase of life – a life that included a new home and a family.

Generally stated, a service member is eligible for a VA home loan if he or she meets any one of these requirements:

  • Served 181 days during peacetime (Active Duty)
  • Served 90 days during war time (Active Duty)
  • Served 6 years in the Reserves or National Guard
  • Is the spouse of a service member who died while in service or from a service-connected disability

Turn to the Professionals

The VA mortgage loan or VA Refinance Loan has always been facilitated and managed by professionals who know the program intimately and can advocate for the homeowner. These professionals, specialists like those at lowvarates.com, have a long and rich history of providing the highest level of assistance to veterans in the new home or refinance markets.

More than 20 million veterans and their families have taken advantage of their VA housing entitlement to get into an affordable home. You might be one of those who has yet to act. There is no time like the present!

Getting started at lowvarates.com is as simple as filling out our short and secure contact form. With your contact form completed, a VA Loan specialist will reach out to you to discuss your unique situation, your objectives and how we can help you prequalify for a home with lowvarates.com.

The Pre-approval

We can provide you with a pre-approval package of documents that contains everything you need to obtain a VA home loan. You will have to qualify for the loan and we know the process every step of the way. For your pre-approval  you will need documents like these:

  • Tax Returns and W2s
  • Employment History
  • Pay Stubs
  • Bank/Investment Statements

Don’t forget BAH! If you are a qualified active military member your Basic Allowance for Housing (BAH) is a significant benefit.  Lenders can count your Basic Allowance for Housing as effective income, which means you can use BAH to pay some or all of your monthly mortgage costs.

Getting the Loan

When you have found the home you qualify for, your loan officer will use a copy of your DD-214 to obtain your VA Certificate of Eligibility (COE). The COE details a prospective borrower’s entitlement and ability to participate in the VA Loan program. We can help you get your COE, saving you time and keeping the process running smoothly.

The VA requires homes to be move-in ready and any problems with the property generally have to be corrected by the seller before a loan closes.

Once you’re under contract to purchase a home, your loan documentation will go to an experienced underwriter for review. The underwriter will verify financial information and other documents and request additional items as needed. It is the underwriter’s job to ensure that everything is accurate and meets VA guidelines. Once the loan is approved, a closing date will be scheduled. At closing, you’ll sign paperwork, finalize your VA Loan and take ownership of your new home.

No Pre-Payment Penalty

Here is a final point about getting that low-interest VA mortgage loan. The VA Loan allows borrowers to pay off their home loan at any point without having to worry about a pre-payment penalty. With the absence of a pre-payment penalty, you are free to consider future home purchases and refinancing options.

Hey, your wait for home ownership has been long enough. Don’t assume anything. Reach out now to the lowvarates.com team of veteran service professionals.

There is no time like the present!

 

Get Started With Your VA Loan Today

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