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VA Home Loan Program

September 26, 2011

THE NUMBERS

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Veteran and Loan Profile


Average Purchase Loan $213,100

$6,941 Median Assets $65,220 Median Income

89% No Down Payment 25% Active Duty 75% Veteran

88% Male 12% Female

Median FICO Score 708


66.4% National Homeownership Rate 82% Veteran Homeownership Rate
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SAH Grants Approved FY10: 1,549

Race: White 76% Black 13% Hispanic 8% Asian/PI 2% AI/AN 1%

Funding Fee Exempt FY10: 27%

NADL Loans FY10: 103 Avg. Loan = $153,735

Total Loans Guaranteed


Over 19 million loans guaranteed since inception of program in 1944 Initial interest rate was 4%

Average interest rate in FY 2010 was 5.02

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Loan Volume

Loan Volume by Type FY 2000 - FYTD 2011


600,000

500,000

400,000

300,000 140,225 200,000 72,851

340,608 144,782 121,386

183,393

151,985

46,724 100,000 177,158 177,026 148,810 152,395

37,330 20,098 15,372 117,940 142,340 180,889 192,625 165,021

119,130

122,625

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FYTD

Purchase

Refi

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VA Loans Perform Well


VAs foreclosure rate for the last 12 quarters, and serious delinquency rate for the last nine quarters,

have been the lowest in the housing industry, even when compared to prime loans.

VA loan performance attributed to: 1) continued adherence to stringent underwriting requirements and appraisal standards, 2) supplemental servicing efforts
MBA Total Delinquencies
1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Prime Subprime 7.32% 27.21% 7.10% 27.02% 6.29% 26.23% 5.48% 23.01% 5.50% 24.01% 5.66% 24.33% FHA 13.15% 13.29% 12.62% 12.26% 12.03% 12.62% VA 7.96% 7.79% 7.44% 6.67% 6.93% 7.05%

MBA Seriously Delinquent


1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Prime Subprime 7.08% 30.21% 6.78% 28.32% 6.43% 27.65% 6.25% 27.46% 5.85% 26.57% 5.61% 26.15% FHA 9.10% 8.45% 8.25% 8.46% 8.04% 7.88% VA 5.29% 5.03% 4.83% 4.82% 4.52% 4.45%

MBA Foreclosures (Inventory at qtr end)


1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Prime Subprime 3.41% 15.39% 3.49% 14.38% 3.46% 13.73% 3.67% 14.53% 3.52% 14.69% 3.40% 14.89% FHA 3.93% 3.62% 3.22% 3.30% 3.35% 3.24% VA 2.63% 2.50% 2.14% 2.35% 2.39% 2.30%

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Foreclosure Inventory

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Top Ten States for VA Loans Guaranteed in FYTD 2011 (thru 8/26/2011)
1. Texas 30,295 2.Virginia 24,284 3.California 23.759 4.North Carolina 20,638 5.Florida 20,066 6. Georgia 14,625 7.Washington 14,183 8.Colorado 12,396 9. Arizona 10,160 10.Maryland 9,290

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Lender Volume Top Ten FYTD 2011 (thru 8/26/2011)


1. 47,301 2. 32,312
6. 6,307 7. 6,040 8. 5,711 9. 5,237

3. 26,122
4. 17,948 5. 7,998

10. 4,746

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September 15, 2011

WHATS ON THE HORIZON?

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September 15, 2011

STAFFING! HELPS ON THE WAY!


Gerry Kifer is back as Supervisory Appraiser Were hiring a Loan Specialist in Loan Policy
This will bring section up to 3!

Will be hiring an Assistant Director for Policy & Valuation


Position has been vacant over a year

Will also be hiring new Loan Guaranty Director

Fully staffed means we should be able to better serve you more Handbook changes and circulars

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September 15, 2011

Certificate of Eligibility (COE) Enhancement F/Fee Exempt Status


COEs will now have a Funding Fee Exempt Status Field COEs will also display amount of compensation being received

Lenders should use COE in lieu of Form 26-8937. COE will serve as proof of exemption and verification of compensation income
In most cases, lenders wont have to submit VA Form 26-8937!! Some cases WILL still require lenders to submit 26-8937
Lenders must carefully read information on COE, including Conditions section

IRRRLs will still require 26-8937, unless lender obtains COE

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September 15, 2011

LOAN LIMITS
VA loan limits are unchanged through the end of 2011
Note, there is no maximum VA loan limit just means max loan where lender stills get 25% guaranty

Absent Congressional action, VA limits for 2012 will be same as Freddie Mac
Please monitor our website for updates

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FUNDING FEES FOR PURCHASES OCTOBER 1, 2011

Veteran Status
Regular Military

Downpayment
None 5% or more (up to 10%) 10% or more

% - First Time Use


1.4% .75% .50% 1.65% 1.00% .75%

% - Subsequent Use
2.8% .75% .50% 2.8% 1.00% .75%

Reserve/National Guard

None 5% or more (up to 10%) 10% or more

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September 15, 2011

FUNDING FEES REGULAR REFINANCES OCTOBER 1, 2011

VETERAN STAUS
Regular Military

% FOR FIRST TIME USE % FOR SUBSEQUENT USE


1.4% 2.8%

Reserve/National Guard

1.65%

2.8%

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September 15, 2011

FUNDING FEES (cont)


No change to IRRRL and Assumptions
Fee remains at .5%

2.8% subsequent use fee is for loans closed on or after 10/1/2011 and before 10/1/2012
On 10/1/2012, fee will be reduced to 2.15

THIS FEE INFORMATION IS BASED ON CURRENT INFORMATION. SHOULD CONGRESS MAKE SUBSEQUENT CHANGES TO FEE STRUCTURE WE WILL POST IMMEDIATELY ON OUR WEBSITE AND FFPS SYSTEM. ALL CHANGES REQUIRE MODIFICATIONS TO THE VA FFPS SYSTEM. WE WILL PUT A NOTICE ON THE VA FFPS PAGE SAYING IF CHANGES ARE INCORPORATED

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September 15, 2011

ELIGIBILITY CENTER (EC) TRANSITION ISSUES

Winston-Salem Eligibility Center will transition all work to Atlanta RLC


Majority of work already done by Atlanta Goal is to have ALL eligibility processing done by Atlanta by October 1 st.

Address for Atlanta Regional Loan Center for COE Issues:

Atlanta Regional Loan Center, Attn: COE (262), P O Box 100034, Decatur GA 30031

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September 15, 2011

UNIFORM APPRAISAL DATASET


VA accepts, but does NOT require UAD compliant appraisal reports at this time A circular will be forthcoming addressing issues with the new format

Some possible changes to be discussed in the circular include:


Lender/Client Field may now require name of Department of veterans Affairs AND lender No longer require Intended User: Any VA Approved Lender in address field for lender. Instead enter lenders address Veterans name to be entered rather than Any Qualified Veteran

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September 15, 2011

ODDS AND ENDS

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September 15, 2011

COE ISSUES
Please read condition section. If it says only valid while on AD AND vets no longer on AD, then;
You need a new, updated COE

If loan closed in good faith using erroneously issued COE, VA will issue guaranty If theres any question BEFORE closing, contact VA Enhancement to online app lets lenders note if prior homes still owned Lenders should use the online application
Mailed in 26-1880s should be minimal

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FILE REQUESTS & DEFICIENCY LETTERS


Please respond! If were sending requests to wrong place, let us know

If our letters arent clear, let us know

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Credit Underwriting

36.4340 Underwriting standards, processing procedures, lender responsibility, and lender certification VA loans involve a Veterans benefit Lenders are encouraged to make loans to all qualified Veterans VA standards are guidelines Lenders Handbook does not address every possible scenario! Underwriters should use judgment and flexibility.

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AND IN CONCLUSION

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THANK YOU

In March 1865, President Lincoln included the following in his 2nd inaugural speech: - To care for him who

shall have borne the battle and for his widow and his orphan.

These words became the VA motto in 1959 and plaques were installed on our Headquarters building in Washington, DC
As lenders you help deliver the benefit to those who have served.

THANK YOU!!

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September 15, 2011