VA Loan – Risk Assessment

VA Loan – Risk Assessment

In case some of you were not able to make it to the online web discussion – here is one of the biggest items we targeted on. VA loan and Risk Assessments:

Last Week’s Questions & Answers: 12/20/2011

Q: Did you know that there have been updates in DU to the Credit Risk Assessment for VA Loan casefiles? 

A: During the weekend of  Dec. 17, 2011, there were updates to DU for VA loan casefiles and evaluating
credit risk assessment. You may see loans impacted as follows:

  • Overall improved credit characteristics for loan
    casefiles may receive an Approve recommendation
  • A change in the underwriting recommendation for some
    loan casefiles. For example, some loan casefiles that previously received an Approve recommendation may now receive a Refer recommendation, particularly ones with back-end debt-to-income ratios over 45%.
  • Reduced Approve recommendation rates. The overall
    reduction may vary by customer depending on the credit characteristics of the VA loan casefiles submitted to DU.

VA Loan casefiles created on or after the weekend of Dec 17, will be evaluated using the new credit risk assessment. In addition, VA loan casefiles created prior to Dec 17, and resubmitted to DU for any reason (i.e. change in appraised value) on or after the weekend of Dec 17, will be evaluated using the new credit risk assessment if there are any changes to any key credit characteristics of the loan casefile (e.g. LTV).

When we run to find out if a home buyer for a VA Loan will qualify we run it through an automated underwriting system. This will give us specific criteria and tolerances for our loan approvals.

 

Should you have any questions please contact me.

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