Financing in 33755>Question Details

Stpetemomma, Home Buyer in 33701

How long does it typically take a lender to approve a VA insured short sale?

Asked by Stpetemomma, 33701 Wed Sep 21, 2011

Seller had a VA loan. Now home is in short sale with an offer made within market value. How long does a lender normally take to approve the short sale when the original loan was a VA loan?

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A VA home short sale takes longer than a regular short sale since the VA gets directly involved. They will do their own appraisal and evaluation of the market. From my experience with VA short sales, you are 4-6 months from getting an approval, counter or rejection. they require alot of financial info from the seller. Their appraisal of the property carries alot of weight. It also stigmitates the property for six months. Trying to get a VA appraisal changed requires an act of God. If your lender's appraisal comes in lower than the VA appraisal after you have setlled on the pricing with the VA, you will have a very hard time to change the VA's mind aobut the value of the property, unless you can show that there were major errors in the VA appraisal and even then you may be out of luck. Just hope that your lender's appraiser is equal to or greater than the VA appraisal. Finally, the major thing about a VA short sale is that the Deficiency will always follow the Veteran. the Vet cannot use the VA benefits unless the deficiency is paid off. They do not go after the seller, but they do not let the Veteran be released from the debt.

Good luck.

Bill Szydlowski
Web Reference:
1 vote Thank Flag Link Wed Sep 21, 2011
getting the approvals from VA took from mid september to mid January. 4 months just for this part. Then the regular sale could start.
0 votes Thank Flag Link Thu Mar 22, 2012
As your real estate professional advised, a buyer in the short sale process is in the most frustrating position of all the players (and there are many) in this affair. Everyone experienced in short sales will be able to refer to rules and standards and before taking their next breath affirm there are no rules! Short sales are the wild, wild west of real estate.

Be patient. There will be a response...eventually. If this is a home you want to live in, your patience will pay off. If you are investing, then continue with your plan B options in the event this home doesn't achieve your goals. It is a very complex process with too many players, too many requirements and 'last minute' emergencies. It a real miracle every time a short sale closes!
Best of success in acquiring your new home.
Annette Lawrence
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
Web Reference:
0 votes Thank Flag Link Thu Sep 22, 2011
Your friend appraiser wouldn't have any conflict of interest unless they are a VA approved lender that will actually get the order to appraise the house. So if your friend is indeed one of the VA approved appraisers then yes, she probably shouldn't render an opinion of value.

So based on what Realtor Bill said below, you absolutely need to keep shopping for your new home until the day you get a copy of the short sale approval letter in your hands at the price you're willing to pay. Otherwise you may miss out on true bargains... bank owned listings.

All the best,
0 votes Thank Flag Link Wed Sep 21, 2011
The offer I made was based on market value, or at least what myself and a friend believed it was valued at. My friend is a local appraiser, and obviously could only offer their opinion, and not officially get involved in the sale for conflict of interest. We knew the VA would send in their appraisers to evaluate the market, so we weren't trying to lowball an offer, but make it truly reasonable.
The seller and their lender are motivated and seller has provided all requested paperwork to the seller. It now will rest on the VA's approval at this point.
Our realtor believed that we could actually get a decision back in as little as a month. Is that totally unrealistic? Maybe because it is the slow buying time of year, they have less of a workload to get through?
We are using an FHA loan, and the contract offer was written up that we would close 45 days after an accepted offer.
I guess if it does take a couple of months longer, that may make our offer a little higher than it seems now if the market continues to drop a little more.

another question: does anyone know of any homeowner's insurance companies still writing new policies in Pinellas County? Despite not being in a flood zone, I can't seem to find any company other than Citizens. :(
0 votes Thank Flag Link Wed Sep 21, 2011
You are asking a great question. It really depends on the lender. Each Lender has their own asset management division that will review this offer and determine if the deal is acceptable. Understand that the lender needs to look into other things other than the loan amount due. There could be items outstanding like taxes, HOA dues, Insurance premiums, etc. So it really does depend on the situation and the lender.

Most of the loans that we process for purchase are short sales so I do have plenty of contacts and lender time frames. i can look up taxes due and see if there are any liens from the HOA that would need to be cleared.

If you like, email or call me and get me the address and I would be glad to get you as much information as I can provide.

Andrew Kashella
0 votes Thank Flag Link Wed Sep 21, 2011
There is no typical time period for short sale approval. It can take six months or more from the time you submit your offer until the deal is closed. Also, in cases when loans are insured by the government the lender has very little incentive to agree to a short sale because they are protected against default by the borrower.
0 votes Thank Flag Link Wed Sep 21, 2011
A short sale, in any form, is the same. You never know. They could drag it out for months or weeks or they may never answer you on your offer. Nothing surprises me on short sales. They might just wait for a better offer without answering you, that is very common.
0 votes Thank Flag Link Wed Sep 21, 2011
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