Military Short Sale Programs - VA Compromise Sale - There is a strong military presence here in the Northern Virginia metropolitan area. With installations including the Pentagon, Fort Belvoir, Quantico Marine Base, and Bolling Air Force Base, many have made the areas along the beltway and along the I-95 corridor home. From Washington DC, to Arlington, Alexandria, Springfield, Lorton, and Woodbridge, military homeowners account for a large percentage of home ownership.
When the real estate market crashed and property values sharply declined, more military homeowners became affected by 'under water' mortgages. One option for homes that are currently held with a VA mortgage, is a VA Compromise Sale. VA Compromise sales are also known as "VA short sales" or "Compromise Sales". When the property is sold for an amount that will not cover the total debt, a 'compromise claim' may be paid to pay the debt in full. In this instance, there is no 'short' because the outstanding mortgage loan is paid in full.
In Northern Virginia, all VA Compromise sales are processed through the Roanoke regional office of the Department of Veteran Affairs. The property is marketed for fair market value, and once an acceptable offer has been made, it is signed by both buyer and seller. The contract is accepted (or ratified) 'subject to approval of a VA compromise sale', so there is still a short sale contingency because the contract needs to be approved by a third party.
Consideration for a VA compromise sale includes the following criteria:
- The property must be sold for fair market value.
- The closing costs must be reasonable and customary.
- The compromise sale must be less costly for the government than foreclosure.
- There must be a financial hardship on the part of the seller.
- On loans that originated on or before December 31, 1989, the seller must be willing to sign a promissory note.
- There must be no second liens or other liens (unless the amount is insignificant). In situations whereby there are second liens or other liens, the seller can request that the lienholder consider releasing the lien and converting the loan to an unsecured personal loan.
- The seller must first obtain a sales contract in order to be considered for the program.
If you are a Northern Virginia homeowner and you have a VA mortgage, please call us at 703-623-8759. We are actively working with homeowners from Washington DC, Arlington, Alexandria, Lorton, Springfield, and Woodbridge who are eligible for to sell their home using the VA Compromise Sale program.