VA requirements

VA Loans and Privacy Act Information

November 29, 2010

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VA Loans and Privacy Act Information

Whenever private information is required to take out a VA home loan, apply for credit or run a credit report, there will always be a segment of the population nervous about handing over personal information to the institutions that require it to do business. In the last two decades, sensitivity has grown over giving out Social Security numbers, e-mail addresses and other critical information.

Some of that has to do with the increased awareness of credit fraud, junk e-mail, and combinations of the two; others are reluctant to give out their personal data because they worry the agencies themselves might somehow abuse the data.

But when the average person understands the hows and whys of this personal data collection, it’s much easier to understand how the information will be used and why it’s necessary to collect it. A bit of understanding goes a long way, especially when it’s explained that in some cases, specific personal information is required or the home loan can’t be processed at all.

When it comes to collecting Social Security numbers in order to process VA loan applications–one of the most sensitive pieces of data in the minds of some–the answers are quite eye-opening to those hesitant about giving out the number. One of the reasons a Social Security number is required is to prevent mistaken identity and/or identity theft.

When the lender requests a credit report, the Social Security number insures the correct reports are pulled. The SS# is also used extensively in the military records system, so again having the number insures the right person’s data is being used properly. Lenders are responsible, according to the Department of Veterans Affairs, for “developing all credit information, properly obtaining all required verifications and the credit report” and “ensuring the accuracy of all information on which the loan decision is based”.

That includes properly identifying the applicant and insuring they are who they say they are. Social Security numbers and other identifying information help the loan officer do just that, and VA loans can’t be processed without the required information including the SS#, a history of employment and residency, and credit reports. There’s no alternative means of identifying an applicant or establishing the right credit picture of that applicant.

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