WASHINGTON – Nov. 12, 2014 – The Department of Veterans Affairs (VA) proudly touts the fact that there are 22 million veterans in the United States and 21 million VA home loans in circulation, plus the number of new VA loans has increased from $24 billion in 1995 to $124 billion last year.
Despite the positive numbers, however, some industry watchers say too many vets are steered away from VA loans – and some aren't even aware of the program.
Dennis Wynant, a former U.S. Marine and vice president for sales at loanDepot.com, says that lenders often pitch veterans' products other than VA loans because they're better for the bank – not the borrower.
"It takes lenders more work and time to process VA loans than conventional loans, which cuts into profits," Wynant says.
In a 2014 survey of 2,000 members of the Iraq and Afghanistan Veterans of America (IAVA) association, only 36 percent had applied for a VA home loan, and some said they were never informed of the program.
IAVA officials said that lack of knowledge could be a byproduct of the real estate boom gone bust, pointing out that foreclosure rates in some military towns were as much as four times the national average.
Some realty professionals also think the VA's "hurry-up-and-wait" requirements for details such as appraisals and inspections, compared with other non-government loan programs, hurt military buyers in certain markets and deter brokers from steering borrowers to VA loans.
VA officials counter that vets who have taken advantage of the loan program have some of the nation's lowest homeownership default rates.
Source: MarketWatch (11/11/14) Goldstein, Daniel
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