VA requirements

VA Vendee Financing: A Reader Question

October 24, 2013

VA Vendee Financing: A Reader Question

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In recent days there have been many reader questions about the status of the VA Vendee Financing program. Vendee financing refers to a program where homes originally purchased with VA loans that have gone delinquent, into foreclosure, and repossessed are put up for sale once more. At one time, the Department of Veterans Affairs had put the program on hold because it was transitioning to a new servicer for these “repo homes”.

A FAQ on the VA official site includes the following question and answer about VA vendee financing:

Will VA finance the purchase of a VA-owned property?
“As the Department of Veterans Affairs (VA) transitions the REO Portfolio to Vendor Resource Management (VRM) vendee financing will not be available.  Please check back for updates to the status of vendee financing.”

On July 5, 2012 VA Circular 26-12- was released, which includes the following:

“In connection with the termination of loans guaranteed by VA, servicers usually have the option to convey to VA the properties acquired at liquidation sales. VA has often sold those acquired properties with vendee (seller) loan financing, which required loan servicing by VA. In addition, VA has from time to time acquired (or refunded) VA-guaranteed loans from private servicers in order to modify the loans at terms beyond the capability of the private servicers so that Veteran borrowers will be able to retain their homes…”

“VA made the decision to consolidate these two awards and recompete it under a single solicitation, now known as REO (Real Estate Owned) and Portfolio Servicing Contract (RPSC). On April 13, 2012, VA awarded RPSC to Vendor Resource Management (VRM). VRM is subcontracting for the servicing of VA’s loan portfolio with Residential Credit Solutions.”

Borrowers who are interested in learning more about vendee financing should contact the VA directly at 1-800 827-1000 or contact VRM at the link provided above.

Do you have questions about VA home loans? Ask us in the comments section.

 

 

5 Comments
  1. Petrish Dyer

    I am on active duty and had to short sale my home using a traditional loan. How long would I have to wait to apply for my first VA Loan benefits after this short sale? I am hearing none because I never used the benefits and some sites say 2 years. Thank you

    • Joe Wallace

      It depends on the circumstances of the short sale. You may not have to wait if the lender is willing to work with you and you were current on the mortgage at the time of the short sale.

  2. Clara Duran Reed

    Hi, Which lenders are handling VA vendee loans and what are the terms? I have clients in California. Thank you!

  3. Steven Alonge

    Which lenders are handling VA vendee loans and what are the terms? I have clients in California. Did this program come back online or not Thank you!

    • Joe Wallace

      VA made the decision to consolidate two programs and offer REO (Real Estate Owned) and Portfolio Servicing Contract (RPSC). On April 13, 2012, VA awarded RPSC to Vendor Resource Management (VRM). VRM is subcontracting for the servicing of VA’s loan portfolio with Residential Credit Solutions." Those who are interested in learning more about vendee financing should contact the VA directly at 1-800 827-1000 or contact VRM at http://www.vrmco.com

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