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How Lenders Should Approach VA Loans

mortgage-appWith more demand for Veteran Administration (VA) mortgage loans, lenders must adapt to meet the growing needs of veteran borrowers.

Joe Murin, who is on the Board of Advisors at NewDay USA, sat down with MReport to discuss how lenders can attract veterans to VA loans and ensure their financial stability in the process.

MReport: What benefits do VA lenders like New Day, offer veterans that are ready for homeownership?

Murin: The benefits are outlined by the Veteran Administration (VA) mortgage guidelines. However, there are a couple things that New Day does above and beyond the program benefits that all lenders should be doing. NewDay employees really spend enormous amounts of time with the veteran to understand what they are trying to do from a financial perspective. They talk in terms of how the VA loan can benefit them. If they believe it will help, then they will move forward with the process. .

Often, lenders discover the veteran is short on cash. This often becomes apparent when it's time to get an appraisal. There's nothing worse than going through the process and have the appraisal come in short and the veteran has already spent $500.00. New Day covers appraisal costs – they just take it off the table. This is a significant benefit that most lenders do not offer.

MReport: In the current market, how are VA loans faring? Are you seeing more veterans entering the market?

Murin: Over the last four or five decades, we have seen more and more veterans utilize the home loan benefit program. In the past, not too many folks knew about it and not too many lenders offered the program, therefore, the program was not widely used. The VA loan is the only type of loan that New Day offers in its portfolio. They don't offer loans from Fannie Mae, Freddie Mac, or Federal Housing Administration (FHA) loans. They have made it a point through their television campaign to broaden the knowledge base of those veterans in the marketplace. And it’s working. We are seeing more and more veterans taking advantage of the VA benefit. Regardless of the economic conditions and the marketplace right now, the exposure to the benefits that the VA offers to veterans has grown exponentially.

MReport: How should lenders in this sector approach VA lending? How can they attract veterans to these loans?

Murin: I believe that every lender that is serious about being a VA lender must truly understand the veteran community and the issues that veterans and their families face. It's all about understanding who these veterans are, and what their sacrifices have been. It can be a complicated population. New Day has chosen to reach veterans through a television ad campaign. Their ads run every day of the week on TV. The company also uses a traditional mail campaign.  And they reach deeply into the veteran community through employee volunteer efforts. Every first Friday you’ll find NewDay employees serving dinner to recovering veterans at Baltimore Station. They also regularly help maintain the Vietnam Veterans Memorial and the American Veterans Disabled for Life memorial in Washington DC.  Employees benefit by learning about their customers and are better able to serve them.

MReport: What are lenders in the VA sector doing to ensure Veterans are more financially viable and stable in the future?

Murin: Whether it's a veteran or just a typical American borrower looking for a mortgage, I think it's the  fiduciary responsibility of any lender to ensure that that the borrower understands the  requirements of a mortgage loan. It's up to the lender to be sure that borrowers really comprehend in-depth all the information on the mortgage application. It's very important everything is filled out completely. Lenders need to analyze all the information on the documents along with the borrower, to make sure there is a definitive benefit to doing what they want to do. If there’s no benefit to the veteran, there should be no loan.  It would do them both a disservice. There’s nothing more important to me than making sure the benefit is there for the veteran, while at the same time, not putting them in a position where the loan is more than they can handle.

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