Originators don’t understand the nuance of Veteran Administration mortgage loans, so most veterans never get to discuss, much less, purchase, a VA loan.
To ensure that they can take advantage of this benefit, the National Association of Mortgage Brokers plans to begin offering a training course and certification in Veteran Administration loans, ensuring originators gain a level of expertise with the program.
“I served in the military and feel a commitment to help other veterans or active members of the service. They are missing out on their benefits because originators are not comfortable with the product,” said Ken Bates, who heads the Veterans Administrative Committee for NAMB.
“I wrote the curriculum for the class and am planning to divulge all my secrets about selling these loans. I might be training my competitors—because I want to help ensure that veterans across the country have access to this product. But that won’t happen unless originators understand the program.” Bates is also the branch manager for Military Home Loans in San Diego.
There are several reasons for originators focusing on other products. In the market today, lenders often add their own underwriting rules to a VA loan, but many originators don’t know what’s an overlay and what the VA actually requires. Because it’s not their primary focus, if a lender’s requirement means the borrower is refused, they don’t realize they could go to a different lender that will originate the VA loan.
In addition, since originators aren’t familiar with Veteran Administration loans, they can make mistakes, that can cost them the loan and commission. A veteran might, for instance, be halfway through the loan process before the realizes that day care expenses are considered a liability that is included in the Veterans Loan application, noted Bates.
“A Veterans Administration Loan is usually less expensive than a FHA loan, sometimes saving a few hundred dollars a month or more, by not having to pay mortgage insurance,” said Bates. “That’s $2,400 a month that the borrower would have saved, with the right advice.”
Too few veterans are taking advantage of their benefits, and Bates, who spent several years in the Navy, is trying to reverse that trend.
