This home in Lighthouse Pointe, Navarre Florida, was just approved for a VA Compromise Sale. A VA Compromise Sale is similar to a short sale, but is used for loans guaranteed by the Veterans Administration. Since the Emerald Coast is home to Eglin Air Force Base, Hurlburt Field, Whiting Field and Duke Field, many local sellers have VA home loans and may be able to use the program if they are unable to sell their homes to cover their mortgage balance.
One of the key differences between a typical short sale and VA Compromise Sale is the disposition of the deficiency. According to the VA website, “ If your loan closed on or after January 1,1990, you will owe the Government in the event of a default only if there was fraud, misrepresentation, or bad faith on your part.” So, in most cases, you will not have to pay back the difference between the net proceeds and your outstanding balance.
Another difference in the VA Compromise program is the length of time the VA appraisal stands. With most short sales, the servicing lender will order a valuation (either an appraisal or broker price opinion), that will be valid for two to three months. In the VA Compromise program, the valuation, conducted by a VA certified appraiser, is valid for six months. That is not always good, especially in a declining market. So if a sales contract does not get approved, the targeted price will have to stand, and not be adjusted even if competing properties are priced lower.
This home in Lighthouse Pointe had a Bank of America mortgage. VA delegates the loan servicers to handle the compromise claims for them, so there is no need for the homeowner to contact the VA directly. This approval only took 30 days!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call (850) 650-7883