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On the Homefront


Editor's note: This story was originally featured in the December issue of MReport, out now.

As national lender Caliber Home Loans, Inc. continues to strengthen its support for the military and veteran community, the Military Lending Team remains committed to expanding its education initiatives.

By educating military homebuyers, real estate agents, and mortgage professionals, Caliber ensures customers are provided with the best experience possible.

Caliber’s National Director of Military and VA Lending, Bryan Bergjans, and Caliber’s Military Lending Team, have been working with a growing number of real estate agent associations across the country. Caliber is aiming to obtain approval at state levels so they can deliver Caliber’s VA training courses to a larger audience.

These courses include topics useful to real estate professionals including understanding VA loan eligibility, understanding Basic Allowance for Housing (BAH) and, most importantly, reading Certificates of Eligibility (COE). Managing these successfully is critical to a military customer’s homebuying experience, as it helps ensure service members receive all the benefits and advantages of VA financing they have earned.

Operation: Education

Real estate agents must understand BAHs and COEs; otherwise, the process can become difficult and potentially prevent a buyer from purchasing a preferred property. Housing allowances across the nation are rarely static, as they are based on several factors. For example, cities known for expensive home prices, such as New York City, Boston, and San Francisco, will have considerably higher BAH rates. Other factors affecting individual housing allowances include pay grade and dependency status.

Active-duty service members’ entitlement is another factor that is often misunderstood. For example, during a permanent change of station (PCS), loan officers and real estate agents may incorrectly believe a borrower has no entitlement left, or that only one VA loan is allowed at a time. This often results in military members or veterans being pushed into another loan product that may not be the best fit for them.

“The VA loan is a great product, if you’ve done your homework. Military and veteran clients need specialized practitioners who are knowledgeable in VA lending so they can advise their client on the best way forward,” Bergjans said. “Ultimately, our goal is to set every client up to have the best possible experience throughout the transaction and achieve a successful result from the beginning.”

Real estate agents and others involved in the homebuying process need to understand their military clients’ situations before they refer them to a mortgage professional. This can prevent errors from occurring down the line.

Karen Dunn, Director of Professional Development and Project Management for the St. Louis Association of REALTORS®, commended Caliber for its commitment to educate and partner with real estate professionals across the country.

“We are very proud of our relationship with Caliber,” Dunn said. “Our agents have gained so much knowledge and expertise around working with military and veteran families. It has been a priceless experience and we look forward to building on the partnership for years to come!”

Building Momentum

VA loan purchases have increased considerably during the last six years, nearly doubling since 2012. As volume increases, Caliber is working against misconceptions in the marketplace that may unfairly impact military customers. Their efforts in this area have led to collaboration with the National Association of REALTORS Governmental Affairs Department in Washington, D.C., and congressional leaders on Capitol Hill.

Caliber is also leveraging internal education courses for its own Loan Consultants. The education program guides team members through various scenarios they may encounter when working with military and veteran clients, as well as with their families.

Caliber aims to provide its team members with a balanced, fact-based approach to VA lending, replacing stereotypes and misconceptions with proven statistics. Team members are designated as Caliber Military and Veteran Lending Professionals after they complete the core courses and are required to take additional courses annually to maintain their specialized certification. As part of its internal education efforts, Caliber strives to build a strong foundation for those who want to become practitioners in this area of the market.

As an active reservist in the Navy, Bergjans has personal experience with the complexity of purchasing a home with a VA loan product.

“There are quite a few markets across the U.S. where the real estate community advises their sellers not to take government contracts,” Bergjans said. “This is partially due to outdated beliefs regarding the VA customer, in combination with past experiences of working with VA appraisers. In the 1980s, ’90s, and even during the early 2000s, VA loans were different and had a much different customer.”

In the past, the VA was confronted with a shortage of VA-approved appraisers nationwide, which led to appraisal orders taking up to three to four months to be completed in some markets. Additionally, VA appraisers were often considered to be more stringent than other appraisers in the industry.

To correct this, the VA reached out to local appraisers throughout the country and encouraged them to become VA appraisers. In addition, appraisers were provided with an after-market survey. After receiving feedback from the survey, the VA saw that their appraisal fees were significantly lower than market value and contributing to their appraiser shortage. Today, there is no lack of VA appraisers in the market, and the turnaround time for an appraisal has been greatly reduced. Currently, a VA appraisal is completed and delivered within seven to 14 days in markets across the U.S.

“Mortgage professionals who entered the market prior to 2011 may believe VA loans are the same as they were in previous decades, but this is no longer the case,” Bergjans said.

VA loans and the beliefs surrounding them aren’t the only things that have changed over the past few years. The typical VA client has changed significantly, too. Bergjans explained that real estate professionals across the U.S. often assume VA customers have poor credit or limited assets.

In statistics provided by the VA in 2016, the average national credit score for a veteran was 713, whereas the national consumer average was only 673. Additionally, the national underwriting approval percentage of VA loans that year was 95.5%. With these results, Caliber is working to shift the current culture to better serve military borrowers.

Since 2011, the military has increased its requirements for service members to maintain sound financial management by requiring attendance at classes and offering financial planning services on base. Most jobs in the military require some level of security clearance, and, now more than ever, service members are required to maintain high credit standards in order to retain their clearance.

Next Year’s Model

Caliber has bold plans for their 2018 national education programs. The company plans to engage with real estate associations across the country to educate over 100,000 people in the industry. Caliber hopes the initiative will assist professionals in understanding the complexities of VA lending and encourage meaningful change within the industry.

Caliber emphasizes how seasoned professionals need to stay up-to-date with VA industry changes. Additionally, Caliber encourages new professionals to gain a deeper understanding of VA lending and military customers. Once training is complete, graduates of the course will share their VA lending knowledge with fellow industry professionals. Ultimately, at the core of Caliber’s strategy, the firm focuses on making cultural changes that will benefit the military community throughout the nation.  

Caliber also plans to create educational classes for military members in 2018. The classes will provide detailed information about the homebuying process and present lending products for which veterans and active-duty service members may be eligible. The classes will be held near military bases across the United States.

To provide a comprehensive, well-rounded education in homebuying, Caliber will partner with professionals outside of the mortgage industry who may assist military homebuyers during the homebuying process. These include insurance professionals, financial planning experts, and nonprofit organizations. In many cases, the teachers will be current and former military personnel. This will help to establish credibility and camaraderie with the students.

“At Caliber, we consider it an honor to support the military and veteran community,” said Sanjiv Das, CEO of Caliber Home Loans. “I’m proud of the Caliber team for its continued effort to provide the best service to VA customers nationwide. We believe that sound VA lending efforts will create a positive, lasting impact on the industry nationwide.”

About Author: Lauren Abney

Lauren Abney currently resides in Oklahoma City, and is a licensed attorney in the state of Oklahoma. She has worked as a Servicing Operations Analyst for Caliber Home Loans since February 2015 and implements regulatory requirements and compliance guidelines from the Consumer Financial Protection Bureau, government sponsored enterprises, and new law stemming from litigation in the mortgage industry. She received a BA in art history from Boston University, and a J.D. from the University of Tulsa College of Law, specializing in international and comparative law.

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