VA Vendee Financing: A Reader Question
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.