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Atlanta Daily World
Atlanta, Fulton County, Georgia
What is this article about?
Veterans Administration in Atlanta warns veterans on Friday that VA-guaranteed loans are binding obligations; veterans remain liable for government losses if foreclosed substandard homes sell below loan balance, per deputy administrator John M. Slaton, Jr.
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For Gov't Loans
Veterans Friday were warned by the Veterans Administration that loan commitments guaranteed by the VA are binding financial obligations for which the veteran is obligated to the government for any loss sustained as a result of government payment of the guaranty.
Reports reaching the VA Branch Office in Atlanta have indicated that many veterans are paying inordinately high prices for substandard homes under the impression they can just consider their monthly loan payments as rent and move out a year or two later, leaving the VA to pay off the lender when the property is foreclosed.
HELD RESPONSIBLE
If this happens and the house is then sold for less than the balance of the outstanding loan, the Veterans Administration will pay the lender the amount which may be claimed under the guaranty, but the veteran is held responsible for the loss the government has sustained, according to John M. Slaton, Jr., VA deputy administrator.
Loan guarantees are an invaluable aid to veterans in bolstering their credit, providing a low rate of interest, and enabling the purchase of a home without a down payment, Mr. Slaton pointed out, but the veteran should use his credit just as cautiously as if he were paying with his own cash. For in the long run he is doing just that.
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Domestic News Details
Primary Location
Atlanta
Event Date
Friday
Key Persons
Outcome
veteran is held responsible for the loss the government has sustained if the house is sold for less than the balance of the outstanding loan after foreclosure.
Event Details
Veterans were warned by the Veterans Administration that loan commitments guaranteed by the VA are binding financial obligations for which the veteran is obligated to the government for any loss sustained as a result of government payment of the guaranty. Many veterans are paying high prices for substandard homes under the impression they can treat monthly loan payments as rent and move out later, leaving the VA to pay off the lender upon foreclosure. The VA will pay the lender the guaranty amount, but the veteran remains responsible for the government's loss. Loan guarantees aid veterans with credit, low interest, and no down payment, but should be used cautiously as if paying with own cash.