- Your credit report may reflect the foreclosure action -- and your credit rating may be negatively affected. This may prevent or hamper your ability to obtain credit in the future.
- As with other federal mortgage programs, the VA will list your home for sale on federal channels along with foreclosures from the Department of Housing and Urban Development and the Federal Housing Administration. In turn, potential homebuyers may be able buy your home from the federal government.
- As the VA loan program stipulates, the federally guaranteed portion of the loan will be paid to the lender by the VA. As a result, the federal government takes a financial loss on your foreclosed VA loan.
- According to the VA, if the government takes a loss on your loan due to foreclosure, your ability to obtain a new VA home loan will be affected. If you use your home loan benefit at a later time, you will be unable to use the amount of your benefit that was lost in the foreclosure.
- The VA may be able to waive your liability on the amount that was foreclosed. However, even if the VA discharges you of financial liability, your credit and future home loan benefit eligibility may be adversely affected.
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