Marion RabalaisLoan Production Officer

VA RLC Atlanta, GA

MBAC Convention October 2008

VA Home Loans 2008

NEW LEGISLATION(Pending)

New Legislation(Pending)

• Increase “Cash-out” refinancing loans to conforming rate.

• No longer limited to $144,000• Raise LTV from 90% to 100%• Renewal of ARMs and HARMs until 2012

82% Veteran

Homeownership

Rate

68.1%National

Homeownership Rate

Race:White – 73%Black – 17%

Hispanic – 8% Asian/PI – 2% AI/AN – .6%

Median FICO Score

679

88% Male12% Female

$62,448 Median Income

$6,000Median Assets

30% Active Duty

70% Veteran

92% No Down Payment

Average Purchase

Loan

$199,000

Veteran and Loan Profile

Year # Loans $ Amount

FY 2003 490,000 $63 Billion

FY 2004 336,000 $44 Billion

FY 2005 165,000 $24 Billion

FY 2006 143,000 $25 Billion

FY 2007 133,000 $25 Billion

FY 2008 179,000 $36 Billion

Total 1,446,000 $217 Billion

Recent Loan Guaranty Workload

Since 1944, VA has guaranteed over 18.3M loans for over $959B

Carolina Loan VolumeFY 2008

• 17,570 Loans• $3,050,779,900• Average Loan $173,635• Commissions earned

$183,046,800

18

5,5

53

13

,20

0

17

7,1

58

72

,85

1

17

7,0

26

14

0,2

25

14

8,8

10

34

0,6

08

15

2,3

95

18

3,3

93

11

9,1

30

46

,72

4

12

2,6

25

20

,09

8

11

7,9

40

15

,37

2

11

0,5

85

32

,61

3

0

50000

100000

150000

200000

250000

300000

350000

2000 2001 2002 2003 2004 2005 2006 2007 FYTD 2008

Volume by Type FY 2000 - FYTD 2008

Purchase

Refi

Purchase vs. Refinance Loans

Loan Volume is Increasing…

02,0004,000

6,0008,000

10,00012,000

14,00016,000

18,00020,000

April May Jun

20072008

Top Five States for VA Loans

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

TX VA NC FL GA

Market Share

VA Mortgages

Total Mortgages

% of Total

CY 05 160,478 7,076,000 2.27%CY 06 137,845 6,478,000 2.13%CY 07 133,279 5,652,000 2.36%CY 08 thru May 72,426 1,882,000 3.85%

471510

590

505548

470 484

587

535

724 726

0

100

200

300

400

500

600

700

800

Num

ber

of G

rant

s

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 FYTD2008

Specially Adapted Housing Grants 1998-Present

Since inception, the SAH program has made over 34,000 grants for approx. $668M

132,534

62,805

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 FYTD2008

Defaults Pending 1997-Present

Foreclosures

Monthly Foreclosures CompletedFY 2003-Present

545

1,641

920

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Flat-line projection puts EOFY figure at just over 9,000 foreclosures

Mortgage Industry Delinquencies

0.77%0.89%

1.99%

6.22%

8.33%

16.42%

5.48% 5.26% 5.59%

2.74% 2.45% 2.88%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Prime Subprime FHA VA

Loan Type

Serious Delinquencies (%) Q1 2006 -- Q1 2008

Q1 2006 Q1 2007 Q1 2008

Source: MBA National Delinquency Survey

• VA does not make subprime loans, and the average VA borrower does not have subprime credit

– VA Credit Standards– Avg. VA FICO score = 679

• Toll Free Number for Outreach: (877) 827-3702

The Subprime Crisis

Opportunities

• With the implosion of the subprime market, VA is one, if not the only, remaining no-down payment option in the market

• Recent policy & legislation in response to the housing market crisis have benefited VA

(HR 3221)

• This has created a unique opportunity for VA

Opportunities

– New Loan Amounts• Limits range from floor of $417,000 (basic, standard

areas) up to max of $729,750 (high cost areas) • https://entp.hud.gov/idapp/html/hicostlook.cfm 

(change limit type to Fannie/Freddie)• Exception: States of AK, HI, Guam & Virgin Islands still

have higher loan limit ranges

– SAH-related provisions• Increased PH and AH grants to $60,000 and $12,000• Annual adjustments to SAH grants based on

construction cost increases• TRA grants for active duty servicemembers• SAH benefits for permanent and total service-

connected disabilities resulting from severe burns

HR 3221 Maximum Loan Limit by County NC, GA, &

TNLimit State County Name

$662,500 GA GREENE$729,750 NC CAMDEN$428,750 NC CURRITUCK$460,000 NC DARE$729,750 NC PASQUOTANK$729,750 NC PERQUIMANS$432,500 TN CANNON$432,500 TN CHEATHAM$432,500 TN DAVIDSON$432,500 TN DICKSON$432,500 TN HICKMAN$432,500 TN MACON$432,500 TN ROBERTSON$432,500 TN RUTHERFORD$432,500 TN SMITH$432,500 TN SUMNER$432,500 TN TROUSDALE$432,500 TN WILLIAMSON$432,500 TN WILSON

Find HomeGo to Lender

Lender: Determines eligibility

electronically using WebLGY/Obtain COE

Uses AUS to get decision in minutes

Orders Appraisal thru TAS (7 workday timeliness)

Obtains Loan Guaranty Electronically 14-21 Days

Lender Closes Loan

Where we are Today..

99% of VA Loans are Automatics

1% are Priors 98.8% are LAPP

http://vip.vba.va.gov

www.homeloans.va.gov

VETERANS INFORMATION WEBSITES

Eligibility Pending Timeliness• FYTD (through August 25, 2008) over

241,000 requests for a Certificate of Eligibility have been received by the Eligibility Center

• Of these 85,000 were electronic applications

• WebLGY allows you to obtain the certificate more quickly and is e-mailed to you when completed. No lost certificates!

• Currently the Eligibility Center is processing electronic applications three (3) days faster than mailed applications

Seller Concessions• Limited to 4% of the appraised value• Does not include normal costs such

as: appraisal, credit report, title exam or title searches.

• May include VA funding fee, extra points or buy downs, prepaid items, buyer’s escrow accounts, payoff of buyer’s obligations

• Adding to sales price then amending contract is not allowed

• The VA funding fee can be paid by anyone!

Adjustable Rate

MortgagesAuthority through September 30, 2008

Annual adjustments limited to 1%

Interest rate increase capped at 5%

Must be underwritten at 1% above initial

rate

Did You Know ?There are now more

contractors than military personnel in Iraq????

That’s right….per the Government Business

Magazine, there are 180,000 contractors

& 156,247 military personnel in Iraq.

Occupancyand the Veteran

• See Chapter 3, section 5 of Lender’s Handbook

• Generally, must occupy within 60 daysExceptions –• IRRRLs• Active Duty service person’s spouse• Specific future event and specific future date will make occupancy possible

Occupancy by Spouse• Veteran’s spouse may occupy if

veteran is on active duty or if veteran cannot occupy within a reasonable time due to distant employment

• No family member, other than the spouse, may satisfy the occupancy requirement

VA Disability IncomeVerification of VA Benefit Related

Indebtedness – VA form 26-8937dedicated fax # in Atlanta: 404-929-

55581) If Veteran has a VA benefit-related

indebtedness2) If exempt from the Funding Fee3) Disability Compensation Amount4) Receipt of non service-connected

pension (requires prior approval) 5) Incompetent? (requires prior

approval)

VA Resale Program

Effective July 24, 2008,the sale of VA owned homeshas been contracted to:Countrywide(Bank of America)

Contact Information

www.homeloans.va.gov

Atlanta RLC 888- 768-2132

General Fax 404-929-5401

Email: atlloanprod@vba.va.gov

Winston-Salem Eligibility Center 888-244-6711 option 1-1-2

nceligib.vbawin@va.govVIP@vba.va.gov for portal

assistance

Questions?

A handout with telephone numbers, fax numbers, e-mail addresses, and web site addresses is available.