va home loan experts

Why do Veterans Have to Fight so Hard for Homeownership?

VA Loan specialists Scott Valins, Jason Sharon, and Josh Lewis discuss the challenges that Veterans encounter when trying to use their Homeownership benefits.

In this live discussion, we discuss:

  • Why it’s so hard to get your purchase offer accepted if you’re using your VA Home Loan Benefit?
  • Why VA appraisals are less risky than any other loan type?
  • How does VA manual underwriting work?
  • How to avoid inexperienced loan officers that do not understand VA loans

Josh Lewis: Welcome back to find my way home live, where weekly we get together with several find my way home expert mortgage originators. And we talk about a topic that is important to borrowers home buyers refinancers around the country. And tonight we are going to talk about a really important topic. Why are veteran home buyers using their VA benefit that they earned by serving us market, getting their offers accepted.

Josh Lewis: We’re going to talk about some of the misconceptions behind the program that sellers have hopefully educate sellers as to why it’s one of the more flexible programs and more beneficial to accept and work with. And we’ll go through that and also talk about some of the pitfalls you can run into as a veteran trying to navigate some of the online information there.

Josh Lewis: So why don’t we just start off by introducing our guests tonight? Two. Left here at lake. It looks on the camera is Jason Sharon. He’s a broker owner. You’re in South Carolina. Jason, correct?

Jason Sharon: Yes. South Carolina

Josh Lewis: and Scott. You are your company recently rebranded to go. Rascal is the name and you guys are in Brooklyn, but what, and both of you guys, so why I’m going to, I’m going to step back after introducing you.

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Josh Lewis: Tell us a little bit about your companies, how you got in the business, how you got to find my way home. And both of you serve multiple states were by wise for me here in California. We only help borrowers currently in the state of California, but you guys cover multiple states. Jason, why don’t you tell us how you got to find my way home?

Josh Lewis: Tell us a little bit about your company and what states you help people in. Sure.

Jason Sharon: So here at Home Loans, Inc, we’re located at Charleston, South Carolina, but we’re licensed in seven states, basically all the Southeast West Virginia. North Carolina, South Carolina, Georgia, Florida, Alabama is where we are, how I got to find my way home is by my friendship with you and Scott Murray.

Jason Sharon: We’ve been sitting at the, you sit next to each other at mortgage conferences for five, four or five years now and rubbing elbows. And you guys came up with this amazing idea. And you reached out to me and I’m honored that you even considered me on the initial list. It’s, I feel humbled being next to someone like Scott.

Jason Sharon: Who’s just a monster producer, puts me to shame what he knows. So that’s how I got it was just being the right place, right time, bonobos for the right people.

Josh Lewis: Perfect. And how about yourself?

Scott Valins: Yeah, sure. Yep. You’re right. We’re we’re in Brooklyn, New York here named my company’s go rascal. I used to run a different brokerage, so rebranded, but also restructured started up launched a new company.

Scott Valins: When I brought on a new a new partner similar to Jason we’re in a bunch of states. I think we’re up to 13 now, but New York, as you can imagine, you got Jersey, Connecticut, PA Stone’s throw on a people commute into New York. So we meet them at networking events and whatnot. Own homes in New York.

Scott Valins: I used to work. I used to live in built a decent part of my book of business when I was living in Cali in Los Angeles. So we’ve got a footprint there and then scattered around in other states. But yeah, similar to Jason, I’ve known your buddy Scott for a while through other organizations.

Scott Valins: We’re a part of have heard him speak a million times. He’s an incredible marketing brain. And so when he put this thing together that invited us in and allowed us to collaborate and grow our brand with a find my way home brand, it was a no brainer. I have really enjoyed the, I think year it’s almost that it we’re almost there or it’s been a year, I think, over a year.

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Scott Valins: Now if we buy since we aren’t going on this or no, just about a year now, right? Like June,

Josh Lewis: July. Yeah. About that timeframe when it kicked off. And just for any of you that stumbled upon this and don’t know what find my way home, the website, the YouTube channel is and what the find my way home expert network is my business partner, Scott Shang back in the meltdown when things went crazy in 2007, 2008, there weren’t a lot of loans to do.

Josh Lewis: He taught himself WordPress and he started blogging, educating people about what’s going on in the housing market. Where are things at, and how can you take advantage of this downturn to work to your benefit? He helped a bunch of teachers in California, a lot of down payment assistance programs. And what we started seeing is people reaching out for around the country and what it became was people getting misinformation, wrong answers from.

Josh Lewis: New or inexperienced loan officers call center loan officers. Some of the big marketing organizations that want to just push everyone through to inexperienced people in the call center and give them the wrong information. So we end up here. I say what I’m about to say, not to pat us on the back, but to give an idea as three individual originators, I just ran the numbers in the last 14 months.

Josh Lewis: We’ve helped over a thousand families. Scott did a ton. Jason did a ton. We did a good chunk out here in California. So that’s not to say Hey, we’re great. It’s to say, this is what we do. A lot of those were hard files. They were files that came from find my way home, someone that was told no. And said that doesn’t sound right, or I don’t think that’s the right answer.

Josh Lewis: And then on top of that, when we’re talking about VA loans tonight, the reason why these two gentlemen are here with me, we are also. Members and another group called vetted VA, a friend of ours, Christopher Griffith started that group and it is an online Facebook groups or interviewed veterans watching this.

Josh Lewis: If you’re not a member of vetted VA, go out there and check it out. You can get any, and all your questions answered. Jason is the original moderator out there. We are all as vetted are mortgage loan. Originators are moderators there and answer a lot of the questions. So that’s really where this discussion is going to come from tonight.

Josh Lewis: So why don’t we start? And either one of you can jump in with this, but either just the misconceptions that sellers have of why they may be down unaccepting of the offer relative to other offers. But then the flip side of that is the actual truth of the matter is the major flexibilities that we have with VA loans.

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Josh Lewis: Scott, you want to kick us off on.

Scott Valins: Sure. Yeah. I I think it’s a lot of misinformation. It’s a lot of like consent probably preconceived ideas of what a, veteran’s bringing to the table from a qualifying standpoint. I think, if you start with we’re in a market now offers or everything’s competitive, multiple offers.

Scott Valins: It’s often 10 20 offers and, a sellers often going to be more interested in someone that’s putting a lot of money down and someone that’s putting a little money down. And while to some regard there is there’s some merit to more money down equals potentially more flexibility when it comes to things like possibly appraisals coming in short or whatnot.

Scott Valins: There’s often usually counterpoints to those things. So you take. That first kind of argument, veterans are entitled to a hundred percent financing. Assuming they can qualify and appraisal appraisals on VA loans have the most outlets and opportunities to correct value to get ahead of the value before it’s even determined by the appraiser or through something called Tidewater.

Scott Valins: Even if the value comes in low, you can appeal it through our OBS and all this terminology. These are things that literally don’t exist outside of the VA sphere. And once an appraised value comes in shore and you can appeal it and other types of loans, conventional jumbo, but you have much less leverage to do so than you do on a praise on a VA

Josh Lewis: appraisal.

Josh Lewis: Yeah. Why don’t we completely unpack that? Hopefully we have some sellers out there watching and understand the difference because you, you said something very. Most VA loans are zero down. So if the appraisal comes in low, the seller’s thinking, Hey, they don’t have any money to cover an appraisal gap, but an appraisal gap is probably least likely on a VA loan of any type of loan.

Josh Lewis: It obviously comes down to the property. The property is going to appraise for what it’s going to appraise for, but walk us through what happens with a conventional loan, a jumbo loan, an FHA loan, if an appraiser goes out and doesn’t think the value is there, then contrast that with what happens on the VA loan and how that Tidewater process works.

Josh Lewis: Sure.

Scott Valins: Yeah. For starters, non VA loans, you really have, there’s no transparency and appraiser get us, gets assigned. They’re certified as appraisers, but VA loans, the appraisers are certified VA appraisers. There’s an extra level of certification. And so on a regular non VA loan praiser goes out praises the property.

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Scott Valins: The first time you see the value is after it’s delivered and he, or she has put their stamp on it. And once someone has decided on a value, it’s really hard to overturn their opinion. As I, the word, the keyword here is opinion. And so because appraisals are just there, they follow certain parameters and guidelines and they’re required to, but ultimately it’s an opinion.

Scott Valins: It’s very hard to change someone’s opinion outside of a material mistake that they’ve made on the appraisal. So that’s a non VA comes to VA. And so anyway, there is an appeal process on non VA loans, but again, it’s very. Imperfect, you have to take many steps to actually get to the appraiser and get your message to the appraiser and then many steps for that message to be delivered back to you and their response.

Scott Valins: And it’s just, the communication is clunky and it rarely results in an improved value and a benefit to the home buyer and the seller, frankly, to close the transaction, as everyone knows. With the VA loan, there’s something called Tidewater. When that’s initiated activated we get notified in advance by the appraiser that he’s not, he hasn’t, you can’t find proper comps or based on his research.

Scott Valins: He’s not confident. Or at this, at that moment, he won’t be able to bring in the appraised value to meet the purchase price. So we’re literally being told that in advance and we have 48 hours, I believe it’s 48 hours to provide, to get with a real estate agents, both sides. Like everyone gets together, rallies around this opportunity, goes back to the appraiser with additional information and they are.

Scott Valins: It’s so common that next thing you know, you get the appraisal back and boom, you’ve got it on the value, the appraisers. Yep.

Josh Lewis: Basically I just think about that. It’s the psychology of the difference of the two processes, correct. In every other loan, the appraiser says here’s my opinion of value and you have to go back and.

Josh Lewis: Here’s why you’re wrong on the VA process, the Tidewater, the the appraiser gets to come from a position of grace almost and say, Hey guys, I don’t see it. I’m not seeing it. Do you have more additions? Help me out. And we get to come back and go. Cool. We appreciate you reaching out. Here’s all the information we have and it’s more collaborative versus combative at you.

Josh Lewis: You mentioned something very important on non VA loans is a very low percentage of appraisal rebuttals that we get any change to the value. Most often the answer is pound sand. Now both of you guys chime in on this with a Tidewater, Jason Scott, how often, what percentage of the time do you see either the value actually coming in at the sale price or at least coming closer than what they were initially telling you?

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Josh Lewis: They were. So

Jason Sharon: I’ve not had the best luck on the Tidewater. Yeah, I probably have, if I was going to pick a percentage, I’d probably say 10 to 50% of the Tidewater’s come in at value. We don’t know what the initial value, very rarely do. You know what value the appraiser is taking unless the appraiser slips up and tells you, you’re not going to know.

Jason Sharon: But the next step after Tidewater is reconsideration of value. And that’s another formal process that you have where you take you. The veteran writes a narrative of, Hey, I, dear VA, it’s a letter from the veteran to the VA proper do your VA. I believe the house is worth this because of this reason you also provide additional cops and I’m probably batting 65, 70% on our EVs because this directly to the VA and the VA has the independence or the authority to manage, to swing the value.

Jason Sharon: I think up to 5,000. And the VA truly wants to put veterans in homes. They know that it’s an amazingly small default rate, the lowest default rate on any program. So even if they put the value a little bit high, they know there’s not a risk there for the lender or for the taxpayers through the VA that there’s going to be a default and a loss on that mortgage.

Jason Sharon: It’s just.

Josh Lewis: Like I, and again, I’m going to sound like a broken record, just recapping this. So Scott walks us through Tidewater where you get to basically collaboratively work towards a value if there’s a disagreement. And if it still comes in low, Jason just walked us through this reconsideration value process where you don’t have to go back to the same appraiser and say, Hey, I still think you’re wrong.

Josh Lewis: You go to the VA. The appraiser that you assigned, came to a value. We still think it’s wrong. Here’s more information. So you have two chances to get to it. And I would bet from my personal experience from the other folks that I’ve talked to, I’ll bet you that 65, 70% likelihood of getting back to the value that the home should have been appraised at, or that the home sold for is accurate.

Josh Lewis: So for sellers at home, yeah, they’re they don’t have the VA buyer may be less likely to cover an appraisal gap. They’re also far less likely to have an appraisal gap. So that’s one of the big flexibilities. Now let’s talk a little bit about

Jason Sharon: the. To be able to cover appraisal gap, I don’t know is a real accurate point because just because the vendor doesn’t have to put money down, it doesn’t mean they’re not putting money down.

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Jason Sharon: And I don’t know what the stats are, but I’m, it’s not small numbers of the number of veterans that do put money down. And if they are intending to put money down and the principal comes to know they still have the option to go to a 0%, use the intended down payment to cover their appraisal gap. And a lot of them have money saved.

Jason Sharon: There are a handful that don’t, you’re, you’ve got to eat three or first house, but you’ve got to, east 67 or oh three or oh four that’s my chances are, they’ve got 10, $20,000 in their thrift savings plan. They’ve got the ability to cover a preschool. They’re just choosing to exercise their entitlement 400% down.

Jason Sharon: It’s just, there’s a lot more flexible.

Josh Lewis: No you’re a hundred percent correct. Cause most buyers have X amount of money. And if you’re having to put the down payment it takes a big chunk of that. It’s pretty rare. I’ve had it happen, but it’s rare that a veteran comes into says I have no money.

Josh Lewis: I wanna use my zero down and I need a lender or a seller credit to cover all my costs. I don’t have any money. They generally do have funds available. They’d like to, they’d like to not use them, but they definitely have them available there. So let’s also talk about some of the misconceptions of VA.

Josh Lewis: 20 years ago, 20 years ago, plus there was a long list of VA non allowable fees that the veteran was not able to pay. And the seller was expected to pick those up. They could be picked up other ways with the lender credit, but a lot of times it fell back on the seller. So I still feel like there’s a ton of realtors out there and a ton of sellers that have that stigma.

Josh Lewis: They don’t understand that it’s been thoroughly modernized and it’s no different than any other loan in terms of what the seller is expected to do. From that perspective, you guys have any thoughts on that and maybe what we can be doing to educate sellers and agents a little bit better that’s not the case.

Jason Sharon: Yeah, for sure. The sellers don’t have enough experience to have the road real deep seated, deep rooted opinion, that the root cause of a seller having all these misconceptions is the listing agent not being educated. And either, either listing agents not educated, they haven’t taken. They just don’t have experience or they have really bad experiences because they dealt with really crummy loan officers, like better Schneider, maybe fed loan officer or somebody.

Jason Sharon: And under we’ll talk about that later, they probably those agents probably have very bad experiences with a crummy loan officer on a VA loan or two or three in the past. So therefore it’s, we have to pull double duty on educating the agent, on the not allowables worse, allowables the previous or the other stuff that we’ll talk about again, but it really comes down to using a real expert, loan officer that you get through whatever our group or whatever that can then be your advocate to the listing agent.

Jason Sharon: So that way they can go educate you. They can hold. We could influence them to change their mind about and not go put a poison idea in the cellar to where they don’t want to accept. Vito’s

Scott Valins: and it’s really, it’s a cascade event because to get a listing agent. To educate and listing agent and get them to open up their eyes to the truths and realities about how great VA loans are.

Scott Valins: The best way to do that is for them to be a buyer’s agent at one point. And for them to, we educate them through the process because we’re bringing them a VA buyer and they need to get their buyer’s offer accepted. So it’s in their best interest to learn all these things and go to that listing agent and represent their buyer appropriately.

Scott Valins: So once you educate a buyer’s agent who isn’t well educated on this, and hasn’t worked with a lot of veterans before next time, they’re our listing agent, boom, we’re now, it spreads that way. And now they’re our listing agent as well as a buyer’s agent. And they will accept more VA offers and recommend those to their sellers, or at least equally offer share offers and not handicappers say that, put it at the bottom because it’s a VA loan offer.

Scott Valins: So it starts with educating the buyer’s agents because they’re going to naturally be motivated to learn that, to represent their buyer, to get their offer accepted it’s in their best.

Jason Sharon: And I hadn’t thought about it, that angle. And

Josh Lewis: I’m glad you mentioned the buyer’s agent. Cause that was the thing that I was going to say.

Josh Lewis: One of the crazy things we see is we, pre-approve a golden VA borrower. We say, Hey, go out into the world, find a home. And they come back and say, I talked to my realtor. They say, you can’t get VA offers accepted. So they want to know what I can qualify for, with a conventional loan and how much I have to put down.

Josh Lewis: So you had mentioned that educating the buyer’s agents and walking them through this as super helpful, but it’s shocking. How many of them and I don’t even know, honestly, I don’t know that it’s a misunderstanding so much as a fear because we have the same thing with FHA offers. You guys probably hear the same thing.

Josh Lewis: I have clients all over. There’s no way they can go conventional it’s FHA and they go out and the realtor calls up. Are you sure you can’t do conventional? I can’t get FHA offers accepted in my market and I go, cool. Where’s your market? Is it? Here’s three that we got accepted in the last three months.

Josh Lewis: Do we need one of those agents that can actually get those offers accepted? It’s a minority of agents, but there’s a mindset out there that they’ll say my market is different. And it’s funny. We’re in three very different markets, right? Scott, you’re in a bunch of states and probably a little bit of overlap with Jason.

Josh Lewis: It’s that every agent thinks they’re in a unique market. And for the last three years, we’ve all been in the same market. It’s not, it’s everywhere and it’s hard for realtors everywhere. It’s hard for lenders everywhere. It’s hard for buyers everywhere. The only person has been easy for is sellers the last few years.

Josh Lewis: So it’s funny having to go through that conversation. But educating buyer’s agents and really, I don’t know what you guys do to do that, but my first thing is. Please, let me talk to your agent, whoever you’re going to select. Let me refer you to an agent. If you don’t have one who has experience with VA loans and let’s step back and talk about what I would say is it is important that you’re working with an agent who has experienced with VA loans.

Josh Lewis: So they don’t have to be educated by anyone because they’ve already been through the process. And also the same thing on the mortgage side, we’re coming off of a market where. Where people could say I don’t understand VA loans. So go talk to another loan officer. Now with 80% of the refinance is gone.

Josh Lewis: Every loan officer in the world wants to do every loan. Hey, I’ve never done a non QM loan. I’m going to figure it out. I’ve never done the VA loan. I’m going to figure it out. So why don’t you guys talk a little bit about why it’s important on both sides that you have a realtor that’s experienced with representing buyers using VA financing, and probably more importantly, on the loan side, why it’s important to use a loan officer who does a volume of VA loans and understands and knows the program and the guy that.

Scott Valins: I think Josh has, it’s a bit obvious, but I think in some ways what you’re describing, isn’t the worst thing, right? Because you have all those loan officers out there used to be able to pick their type of loan. And I’m not going to say they’re steering the borrower into a conventional loan VA.

Scott Valins: Steering’s not really that’s what they think is the best way they’re going to get their offer accepted conventional loans. Aren’t bad. But if more of these loan officers out there are finally saying, all right, I might as well learn VA loans. That’s good for us. Sure. Do we want there gonna be some trouble some, deals that don’t go that well for the veteran, the aid, the whole experience might not be great, but as long as the veteran closes on their own, they’re in their own.

Scott Valins: And that ELO is, did their first VA deal. And now they’re onto their second, third. I think that’s great for all of us, right? Every yellow out there, that’s working with a veteran to encourage that veteran, help that veteran in every way possible to get into a home using a VA loan, assuming the veteran wants, listen, if someone’s putting 20% down and they don’t have a disability rating and they have great credit and it might be a jumper.

Scott Valins: Don’t get us wrong. All three of us are here to say the VA loan is not the perfect loan for every veteran and every, in every circumstance. That is a fact, and we’re all willing to share that we’re not here. We’re not guys that just push VA loans at any cost it’s. So it turns out that really most of the time it is the best loan for the veteran but not always, but I just think, the more listen, three years ago, I was doing one or two VA loans a year before I joined vetted VA, why my marketplaces is a little funky I’m condos.

Scott Valins: And co-ops a lot of them being in the New York city area. And even when I’m doing, single family loans and long island, whatever, I’m not near a very like big VA and not near a big base or whatever, we got west point and a couple hours north, but I just it’s, they’re not in my backyard the way they might be in Southern California, for example, and in South Carolina and whatnot, I was that guy a few years ago that was like, oh, a VA loan.

Scott Valins: There’s so much to learn. These are so different. I’m afraid of screwing this thing up. And I’m not gonna go and, actively try to help veterans out there, work with an independent mortgage broker to get the best rate. And I know we’re going to talk about all that. Yeah, now I’m very experienced.

Scott Valins: I’m not like Jason I bothered Jason all the time with guideline questions or whatnot. I’m sure Josh you’re right there with them. But it’s great. And I know enough to now go in and represent my VA buyers, and all the ways we’re talking about communicating with both agents and making sure they’re getting.

Scott Valins: That fair shake that they deserve we make an offer.

Josh Lewis: Staying on the topic of it being a very flexible program. So you’re saying you were a little spooked off of it and didn’t have a lot of experience with it. It’s a unique program, but largely unique in, in flexibility.

Josh Lewis: So before, before we talk about the flexibilities, I do want to go back to one last thing when we’re talking about the appraisal values and why we have a lot of flexibility and leeway and values, but Jason, you want to talk to us about the minimum property requirements and why a lot of agents and sellers are freaked out about that also, and why it’s generally not an issue, but what are they and why does it bother and freak out buyers and

Jason Sharon: sellers?

Jason Sharon: So most real estate agents don’t realize that even conventional loans have mineral property, right? So you have to go that education route of, Hey, yes, there are better property conditions for VA. They’re actually getting less, many less pages than the F. And the USDA men, property pharmacy, more than conventional.

Jason Sharon: But why you should be scared about it is there’s a full process. Just like the ROV that a veteran can request a waiver of that minimum property condition. For example, we recently, I had a a success story where we had a old lap dated shed. And it was a really old property and the property was gorgeous.

Jason Sharon: The property was nearly historical and there’s a tremendously old shed on the property that by normal via standards would need to be repaired, removed, and there was no way you repair it, us, the client, actually, during the process of wanting to buy the house, identify the opportunity to sell this shed to a would recommend reclamation.

Jason Sharon: So we actually got an offer of like $3,000 from the company of saying, Hey, we’ll come take this off your property. We’ll give you $3,000 to do it. And I use that as a, an appeal to the VA V it’s cool. Yeah. That’s a good idea for the vet. It makes sense. They had a timeline of when they’re going to get it done and a dollar amount.

Jason Sharon: And the VA said, yeah, that makes sense. The, it is scary to a lot of people because there are some things that you’re not gonna be able to waive, but if it’s, if it makes sense, it’s gonna be.

Josh Lewis: And re really for the most part, it comes back to health and safety issues. Things like if there’s something that’s going to get called out on that VA appraisal, it’s something that a conventional buyer, they might have the ability to waive it, but they’re probably not going to want to waive it.

Josh Lewis: I just, I don’t have this issue a whole heck of a lot. We have it more, like you said, on FHA loans. And even then it’s fairly uncommon and fairly minor to get it brought to standards. And then in the current market, even on the FHA ones where we have property conditions, repairs that are required for the most part, it hasn’t been a problem for the seller.

Josh Lewis: We’ve had our buyer’s agent go out, our buyer, go out and scrape some paint, tear down a termite infested patio, cover, whatever it may be. So again, it’s an issue that’s overblown and doesn’t generally cause us a problem in terms of closing loans. From that end, let’s kind of transition and talk about some of the flexibilities Almost every other loan program.

Josh Lewis: We have things that are more set in stone. Here’s a maximum debt to income ratio. Here’s a minimum credit score. A lot of that stuff we don’t have with with VA loans. So either one of you, you want to talk about some of your favorite flexibilities in a VA loan that we have that you don’t have in other types of loans.

Josh Lewis: Sure. So I

Jason Sharon: salivate the option to opportunity to talk to an agent about this. You’re very front of the VA guidelines is these guidelines are written as a guide. And another rider has the ability to apply common sense to it. So I’ve snippet that right from the guidelines and send it to agents and make sure they understand.

Jason Sharon: And then the other part of that, so many people don’t understand is you have doubled the number of underwriters on a conventional loan. Then you have four veto, so right. You have PMI. So if you’re not putting out 20%, you’ve got PMI on a conventional loan. Most people don’t realize that the once the loan is quote unquote, clear to close by the.

Jason Sharon: It goes to a PMI company who reiterates the load, it could produce and will produce under additional conditions. So yet, so you have one underwriter on VA who is given the authority and autonomy by the VA to use common sense approach, to very fluid, flexible guidelines like Josh, a student pointed out, no DTI limit, no, no minimum credit score.

Jason Sharon: And then contrast that with double the number of underwriters with a D with double the risk of having issues on a, on an underwriter. So

Josh Lewis: put it into context because I it’s sometimes shocking to people when they hear the number like for each of you. What’s the highest that the income ratio you’ve ever got approved on a VA loan, 79.

Josh Lewis: Yeah, mid seventies, right? You hear that and that’s shocking because any other loan program FHA will let you go to 57. And that’s the only thing that will get you close to that. So when you hear seventies regularly, and then the second thing that I hear is SASA dangerous program. We’re risking taxpayer money, but Jason, you already said, this is the lowest default rates of all loans.

Josh Lewis: So what is the VA doing that they’re comfortable lending to such high loan, to values and still having such low default rates there. They are doing something to make sure our borrowers have the ability to repay Scott. What do they do in that? Yeah, they’re

Scott Valins: doing a, what’s called a residual income calculator, which is just, if you think about it, it’s probably the most common sense income in and it’s the most common sense way to determine if someone after making their mortgage payment has enough money left over to, to live, basically, because that’s what it’s all about, right?

Scott Valins: With all these other loans, use some of these just blanket, like 50% DTI yet you don’t look at any deeper into what someone’s lifestyle is and the size of their family, the size of their house, where they live. And other debts, they might have childcare, things like that. In a time now where you know, costs are running away from us, I would make the argument that VA loans, no matter what their DTI are going to perform even better because there’s that extra piece of analysis done.

Scott Valins: So residual income calculator. He’s I said, I’ll go a little bit deeper, takes into account fit in the size of the house first. They apply a factor times the size of the house and it comes up with what’s expected to maintain the property. The understanding is the bigger a house.

Scott Valins: The more things there are to, there’s more costs more to maintain it. So they have to make sure that’s leftover in your income. After the mortgage payment is taken into consideration. They look at the size of your family. Like I mentioned before they take into account. If you have any larger expenses, childcare is sometimes a big thing that doesn’t show up in the analysis of other types of loans.

Scott Valins: It shows up. What else they look at? Jason, what else am I in my thinking, oh, they take your taxes, right? You’re if you’re self-employed or no, either way. They take into account your state, federal social security taxes. They take everything, not everything under the sun.

Scott Valins: I don’t know about your groceries and things like that, but there still needs to be money left over even after they subtract out all those additional things. So a high debt to income ratio will often get approved on a larger loan. Because the residual income, right? So if someone’s that’s income ratio is 70%, that means their housing payment.

Scott Valins: Plus what’s on there, that’s on their credit report could be 7,000 out of $10,000 of income, or it could be 8,000 out of 11,000 or whatever. So the larger you go in loan amount, the more room there might be for that extra income to cover those additional items that we looked at. And then there’ll be the money leftover to cover everything else.

Scott Valins: So in summary, it’s just an extra, it’s an extra way to look at it. It’s a different approach. It’s a way more common sense, black and white approach. And it allows you to have a higher debt to income ratio through that methodology yet still get approved for your loan. And it’s reassuring to the I’ve gone through residual income calculations with a veteran before to show them why they’re not qualifying.

Scott Valins: And it’s okay, cool. Yeah, I guess that makes sense. Maybe I shouldn’t actually take on this loan. Yeah let’s go lower.

Jason Sharon: Beautiful. The beautiful thing about it is contrast compared to contrast Scott’s scenario there, where that veteran has $3,000 left.

Jason Sharon: At the end of the month. So chances are, unless they make some really bad gambling decisions that Vegas they’re probably going to have enough money to cover whatever emergency things pop up. When let’s see you take that down to a an elderly retired couple that maybe he was a Vietnam vet and they’re on limited income.

Jason Sharon: Maybe they’ve got social security and they’ve got a small military pitcher. They’ve got a small VA disability payment coming in and let’s say their income is over. $2,000 a month, $2,500 a month. And maybe their dead tinker ratio is only 42%, but there’s so much there. There’s just not that much leftover in the month to cover the residual income.

Jason Sharon: So yes, it is snazzy and fun and sexy to think, oh, I can get approval at 79%, but if you have a very low income entering it into the equation like Scott was talking about, then you may fail residual income at a DTI below, below 50%. And that’s the beautiful thing is it’s basically it’s equal opportunity measuring stick to where it doesn’t matter anything about you, except for how much money do you have left at the end of the month?

Jason Sharon: Not how much money do you have left? I

Josh Lewis: And it is it’s an awesome flexibility in that it gets people into homes that would be declined on other types of loans, but also with the safety net of a calculation showing they do have enough money to feed and clothe themselves after they pay that mortgage every month.

Josh Lewis: So from there, let’s transition to one of the absolute best flexibilities that we have with the VA loan that we also have with FHA. But for the most part don’t really have with conventional is say that loan does not get approved through the automated underwriting. When we’re talking about a 70 DTI 65, 70, 72 DTI, that has to go through an automated underwriting engine that analyzes the whole file and says, yes, we’re good with that.

Josh Lewis: Let’s say it comes back and says, no. What, what happens? What are we able to do with the VA loan that we aren’t able to do with other types of loans? Scott, you wanna jump on that one?

Scott Valins: I’ll let Jason take the manual underwriting. Like the,

Jason Sharon: yeah, I do a lot. Last year, I closed 291 number and loans, and I’m not proud of that number.

Jason Sharon: What I’m proud of is that 40 of those were declined somewhere else. So that’s a whole neighborhood. So somebody got pre-qualified by some loan officer. That’s what choppy. And they went out, got under contract in a house and got, got an underwriting and then got told no. And so they call around and they call in 40 of those, ended up in my lap and I closed them anyway.

Jason Sharon: And that’s because I understand NATO under guidelines because I studied it. So like Josh talked about every file, doesn’t matter. The flavor VA USDA, conventional VA USDA, FHA conventional gets submitted to an automatic alerting system. That’s BC in a computer in the sky. It’s an algorithm that my sex that files a whole, it slices that file went to multiple layers.

Jason Sharon: Credit score credit history, work history loan to debt, income ratio, assets a bunch of different layers here. Are you getting a gift or you’re not getting a gift? How much do you have retirement and months of reserves, there’s probably a hundred different layers. And then that automatic underwriting system assigns a risk factor to each of those layers and then adds up all those risk factors and give you one of two responses, either approve or refer.

Jason Sharon: That’s your only two options approve a referral. If you get an approved response, it’s an easy piece of vote. Give that guy or gal her keys, just to make sure that all your documentation in the loan match what’s on the application that was submitted to the automatic Amex system. If you get a refer response, it’s a whole nother ball game, a whole nother set of requirements that you have to meet.

Jason Sharon: And basically what’s going to happen is the underwriter’s going to closely scrutinize your payment history, your credit history, your housing history, and your job history and your assets for the last 24 hours. Generally, this isn’t hard and fast, but generally I w I haven’t lost a manual underwriting with these five require.

Jason Sharon: If I meet these five requirements first as no late payments on the credit report in the last 12 months, zero zilch, nada, none do not pass. Go do not put $200. Nobody can credit the last 24 months in the last two years for the last 24 months. I, if you have up to two 30 day late payments, I’m not talking about a 60.

Jason Sharon: I’m not talking about 90. I’m not talking about three 30 to eight payments to 30 day late payments in the last two years. You’re probably be good. Third thing is verifiable rent history. So not that you’re living on your buddy’s couch, paying them a hundred bucks a week just to be there, but you’re renting from a person and you can track your checks that you wrote to them or your Venmo that you rent to her that you sent to him or renting from our apartment complex, that he gives you an idea.

Jason Sharon: Of record that for VA the last 24 months of rent has been on time, because that shows that you take your housing payment history, your housing payment housing situation seriously, and you pay it on time. FHA may know, right? You’re good. At 20, at 12 months, not 24, PA’s slightly more restrict from that. Third thing is our four thing is stable job history.

Jason Sharon: So no job gaps were 30 days, not a job hopper, not more than three job changes the last 24 months. Good stable job history. And then the fourth, the fifth thing is two months of reserves. Months of reserves means that whatever your mortgage payment is, you’ve got that much extra money in your bank account or retirement account that you can get a hold of after your down payment closing costs.

Jason Sharon: So let’s say your mortgage payments been 15, $1,500. After closing costs and down payment used to have $3,000 leftover in the bank that shows that you don’t live paycheck to paycheck. It shows that you made your bills responsibly. So if you’ve got those five things on a main yard I have not lost one of those fights.

Jason Sharon: If you don’t have those five things, you’re rolling the dice that you’re going to get that.

Scott Valins: But if there are some flexibilities lender to lend their slightly different interpretations, right? Jason, so that’s one of the beauties.

Jason Sharon: I am slightly conservative on the, on those things, but that’s what I find to be a good general baseline that if you meet.

Jason Sharon: You should have a strong level of COVID you to get approved. If you don’t get approved that your loan officer socks

Josh Lewis: and just we’re going to go deeper on that in a minute. Once we go through all of these VA flexibilities, but when I would, I just want to reiterate 41. Saved files that were turned down.

Josh Lewis: I we didn’t have that many last year. I don’t have the exact count, but I would say every month, one to two deals we do that were turned down. I don’t even have to ask Scott. I know the fact is they’re closing deals every month that someone was turned down somewhere else. We were in an environment where it’s all marketing driven.

Josh Lewis: We have big mega lenders that are the McDonald’s of mortgages, and they’re turning down good borrowers left and right. Either through ignorance or through overlays, which are guidelines that they add on top of the guidelines. And it happens especially with VA loans. But before we get into that so I should have known to go to Jason with the manual underwrite, but you and I, you being in New York, maybe in here in California probably are more benefiting from the blue water than Jason is.

Josh Lewis: Why don’t you tell us about that flexibility that as of 2020 veterans have a very unique benefit that other loan types don’t. Blue

Scott Valins: water,

Jason Sharon: the blue water Navy yet

Josh Lewis: in terms of not having loan limits.

Scott Valins: Oh, okay. Sure. Yeah. No, of course. Thank God. Historically. The VA loan limits were tied to conventional loan limits.

Scott Valins: And they did away with that in 2020. I didn’t know. That was the, they love to throw the

Josh Lewis: blue water or something’s got water. It’s totally

Scott Valins: pretty, it’s pretty straightforward as long as you have not used any of your entitlement which means as long as you. Generally means as long as you don’t either have an existing, outstanding VA loan if you recently had one and it was paid off and you re you reestablished or entitlement and as long as you didn’t lose some of your entitlement, that’s because you had a problem with the previous VA loan through a foreclosure, any issues, but let’s just assume you’ve never had a VA loan before.

Scott Valins: There is no limit. To your loan size and securing a hundred percent financing on that purchase price. There’s literally no limit. There are, there is a threshold at which point the loan becomes a jumbo loan, insure lenders have some personal we talked about overlays. This is a place where even in the mortgage broker channel where we like to brag that we have the least, if not, no overlays, there are absolutely restrictions.

Scott Valins: It’s very hard to get a multimillion dollar, a hundred percent financing, VA loan, but I won’t sit here and tell you that it’s not possible at all. But it’s a beautiful thing, Josh, right? We’re talking in my market, all I do, over a million dollar VA loans, I wouldn’t say on the regular, but

Josh Lewis: frequent several times a year, frequent.

Scott Valins: Absolutely. They’re beautiful loans, great terms the considered jumbo VA loan. So they’re not treated any differently than a jumbo VA loan. That’s a dollar over the the conforming loan limit. And yeah it’s fantastic for the veteran. And it allows them to play in this space.

Scott Valins: Like we all know, especially Joshua market, my market, these are jumbo markets. We’re all thrilled that the conventional loan limits have risen nicely. And we can put, $647,000 loans into the conventional bucket. I’m still shocked sometimes that’s the limit, but we need to go higher than that.

Scott Valins: And in the past, we, we have veterans who want to, maximize the benefit of the, of their VA loan options and getting a hundred percent financing. Into the millions into the one millions is phenomenal for the veteran.

Josh Lewis: Yeah. So before we move on to the interesting part of the conversation, or the more undressing part of the conversation, anything, the pink water, the pink, the purple water we’ll get to it, but any flexibilities, any awesome flexibilities of the VA loan program that we haven’t covered yet?

Josh Lewis: Did I miss anything?

Scott Valins: Probably because there are so many

Jason Sharon: yeah, we, the whole idea of you don’t have to worry about the number of collections or the size of the collections or the number of disputes or the volume of the disputes on a credit report is amazing. That’s, that’s yeah, it has significant deleterious effects on FHA and conventional modes and USDA loans where there’s not that, it’s up, it’s underwriting discretion.

Jason Sharon: If that. That derogatory credit behavior is more than a year old. You don’t have to worry about it. So that’s a wonderful

Josh Lewis: flexibility. So additional credit flexibilities loan amount, flexibilities debt to income, flexibilities in terms of how the appraisal’s handled. It really is amazing that there’s anything negative about the program, because anytime I get together with loan officers and realtors that do a lot of business with VA financing, they can go on and on of great stories of the flexibilities that enabled families to be helped that wouldn’t have been in any other way.

Josh Lewis: So let’s

Scott Valins: transition. I know this is more of a purchase conversation about the Earls. You have to have a VA loan to be able to do a VA refinance at a later date. And those are hands down the easiest transactions for for us as loan officers, but really it’s for the veteran to grab that lower interest rate that they’re entitled to in the future.

Scott Valins: No, no income check, no appraisals as streamlined as it comes. And you have to have a VA loan to qualify for that program. So stability

Jason Sharon: benefit. Yeah, I think it’s amazing bit of, I think we’re seeing a boom of Earl’s late 20, 23, for the people that are buying now in this, higher than recent rate environment, the Earl’s are going to be an amazing benefit for veterans to capitalize on you’ll in your 1218.

Scott Valins: And the list goes on, right? Protecting their equity through having to wait a certain amount of time for them to secure an additional loan. So they’re not subject to predatory lending and, we could go on for

Josh Lewis: hours. You just led to the perfect transition. Predatory lending, waiting periods, those came into play, not so much because of the bigger call center organizations that we’re going to talk about.

Josh Lewis: But a lot of the little refi shops around the country that were doing agregious things taking advantage of veterans. So the VA did a great job of tightening up the program and protecting veterans from equity, stripping re you know, refinances that didn’t truly benefit them and just generated a commission.

Josh Lewis: But one of the big things that we see in VA loans, now you can’t turn around and not see a rocket mortgage commercial. Does VA loans. They’re not big on it, but in the VA space, we have three or four lenders that market aggressively to veterans and tell them how many veteran members they have and how many veteran members they’ve helped.

Josh Lewis: And. I don’t want to say I don’t use the word predatory with them, cause they’re not doing things that are just burying veterans, but there are some big negatives to going with one of the big call center lenders. I, what I like to say. So really what do we have? We’ve got veterans United and new day, which are mortgage banks that they target veterans exclusively.

Josh Lewis: And then we also have a USAA and Navy federal credit union that both do a lot of VA loans. And all of them want to lead by saying, Hey, we service veterans. We help veterans look at all the veterans we’ve helped, but when you look we have the data, Christopher Griffith over a vetted VA has the data.

Josh Lewis: They charge higher rates, they charge higher fees, they have overlays. So without just ticking off bullet points, Jason, what do you tell someone? Because they’re, I know for a fact with the volume of VA loans that you do, you’re talking to people who said, Hey I’m already pre-approved with veterans United.

Josh Lewis: How does that conversation go? And what do you tell them is the benefit to working with an independent mortgage professional versus someone in a call center or working for a place like veterans United? Sure.

Jason Sharon: So my biggest competitor is myself, me not doing what it is I need to get done every day. You’ll be getting distracted, but I would say the neck, the one bank that is a competitor that I hear on a daily basis is Navy fed because they’ve got a big presence in my local area and I’m the, I was in the Navy.

Jason Sharon: So I get a lot of, I get a lot of the military referrals, Navy referrals, which everybody has already has a big Richard for maybe. What I say is that I educate, I lead by education, just like we all do here of we’ve veterans and I speak. With high-level conference that you’re representing a majority of veterans are very gullible.

Jason Sharon: We are very young and we were taught to be gullible in the military. You don’t question chain of command. Go do what you’re told. Say yes, sir. No, ma’am and go get, go take that bullet, go into that compartment that you might die in. Cause it’s filling with water, go fight that fire, go run to that foxhole go do whatever.

Jason Sharon: Without questioning and in the military has to be that way. So that gets ingrained into us. And whenever we don’t have the ability to question the chain of command now that you’re out or if, even if you’re not out, you’re still active duty, but you’re making non-military decisions. A lot of these lenders are preying on our lack of questioning.

Jason Sharon: So like it disgusts me that new day USA uses, oh, general. Wants you to refi maybe on your suit because I’m saying this, but yeah, but that’s just such a disgusting thing that some general is putting his name on sending these letters to veterans to try to prey on that gullibility that we have, because I, oh general told me that I’m gonna, Sergeant is going to call then say and say, okay I want to refire one, a buyer already pre qualify because of that.

Jason Sharon: So I had to him like, look, you are able to have independent thought in question and shop around and discuss your finances at a different level than just being yes or no, man. Do whatever it is that you told. So that’s what I think is so disgusting about these companies that are branding themselves in that direction to capitalize on us veterans that just want to do the right thing all the time.

Jason Sharon: And we just do what we’re told.

Josh Lewis: So what are the biggest downsides that you see to working with one of the, one of those lenders? And I will back up and say I don’t believe they’re predatory. They’re not killing people. They’re giving people suboptimal loans that that they can get better terms.

Josh Lewis: They can get better service, better outcomes, other places. So when I say better, what does better look like?

Scott Valins: Yeah. So I think the one thing that comes up often, I think with veterans United, for example, is I think they have their captive, oh, you have to have a six 40 credit score or higher with them.

Scott Valins: If I’m correct in my markets, I mostly run into them. When I do I’m on long island, I do a decent amount of VA loans in long island. And we’ll come across consumers that will, like Jason said, we’ll take that as face value and say, I can’t get a VA loan. I have a 6 28 credit score and they’ll, go back to doing what they do and say, I have to wait and following command or whatever.

Scott Valins: And we need to be out there in full force. We do it through our service with Veta VA to, to educate and remind them to, look around and ask questions and not just take things as they’re being told. That’s the main overlay I’m exposed to the other thing, the larger an organization, the more diluted their their service is going to be.

Scott Valins: And I say this about them. And I also say this about large retail banks is listen. Wells Fargo clearly is doing something right. They close a gazillion loans a year. There’s a lot of people at Wells Fargo and call centers that have you ended up in their hands. It’s going to be absolutely atrocious experience.

Scott Valins: If you write. Properly referred to a mortgage banker at Wells Fargo has been doing this for 20 years. You have a good chance that he’s going to hold your hand through the experience and get you to the closing table, minimum minimal pain. That’s beyond that transcends, product type. But when you go to these larger call center site size places are just these massive organizations.

Scott Valins: They spent so much money on marketing and branding and endorsements that they don’t typically have just the quality of the loan officer that you’re going to get at a smaller place. Jason said ties in perfectly his biggest competition. If it’s himself, it means he’s waking up at every day.

Scott Valins: There’s no one out there spending a million dollars for his brand and may get calls to come in the door. He’s going out there working for them, loan by loan. He knows he has to deliver an outstanding service to do and so that’s typically just why working with any kind of smaller institution and working directly with an individual.

Scott Valins: Who you’ve been referred to is going to give you just a huge headstart on the likelihood that your experience is going to be great, and that you’re going to get coached and advised properly. And, we all know that. Our rates and our fees are almost always, if not always lower than these competitors that we’re dealing with.

Scott Valins: And that, that’s first and foremost, we’ll set our eyes on loan estimates that have a great rate. And the veteran won’t look in box a and see how many points there they’re being charged. They were, it was never explained to them. They don’t even know what a point is or how that dollar amount is, contributing to the rest of their closing costs.

Scott Valins: They maybe just believe that. That’s how this loan works and their total closing costs are X and that’s what they have to be. And I’ve yet to see really a veteran come to me and say, Hey check this out. I’m well aware that I’m being charged two points. I understand what they represent and how they could go up or down.

Scott Valins: No, you just get something handed to you and you ask them, are you aware of this? And nine out of 10 times, you’d say no, I didn’t know. Thanks for pointing that out. Can you explain that to me? And that’s baffling, right? It’s hard enough to go through this process and get to the other end and even close and own a home to not have an advisor.

Scott Valins: Who’s right by your side, proactively walking you through all the, the important documentation is a lot of stuff you can gloss over. But the important documentation is alone. Estimate is it’s mind boggling and it’s frustrating. And it’s also an opportunity for us to step up to the plate.

Scott Valins: And look great and take care of the veteran.

Jason Sharon: And let me send that about the bank of America loan officer. That was good cause because absolutely this is not meant to be a bash Fest. Please see if your Washington’s not meant to be a batch Fest of loan officers that aren’t brokers by no means. Either at every institution, those would be great loan officers and it would be crummy mono.

Jason Sharon: So you to be great realtors that are real estate brokers would be horrible, real estate agent that brokerage, and there’s going to be those brokers out there that are whore. Whatever. I know people, I knew brokers that I wish went to retail, so they took their bad name to get to the real estate side and not, not tarnish the name of brokers.

Jason Sharon: So my absolutely there’s good. There’s good. One recidivate United. I’ve got a specifically. I got to call. It is probably two months ago, three months ago by I said, Hey, I was told to shop around. I found you on Google. You got great reviews. What can you do for me? And so I started talking to him and he was pre-qualified for vintage, that he was under contract with veterans United.

Jason Sharon: And I said they’re going to, I’m going to beat her. I laughed at, you know what, it’s a vintage night. So this would be easy slam dunk thing. So I pre-qualified him issued of disclosures, locked him in. She was closures. I was beat Vietnam. It was tremendous in terms of our change veterans, the load officer at veterans United had done a lift, had done two nodes for this guy in the past.

Jason Sharon: So this guy had a longstanding multi-year relationship with his loan officer. The loan officer actually came back. Didn’t batch me. I was still better than him, but because this loan officer was such a friend, of the veterans still chose veterans United at a higher rate, higher fees than.

Jason Sharon: And I’m fine with that because he felt comfortable with the $300,400,000 transaction with somebody that he had, years of history. So by absolutely there are good loan officers at VU and baby fed at big bear for wherever. But I would offer that if you looked at the talent pool as a whole, there’s going to be a lot less, let’s say empathy a lot less level of care for most loan officers, because you’re going to be a one and done.

Jason Sharon: You’re not going to send the referrals. And like I said, do come to them or for refi, the are just a number on a call center versus where you go to a small, independent, either a mortgage broker preferably or maybe find a small retail branch somewhere that has some really good loan officers that really care it’s all about the level of care and the level of skill level experience much more than it is the channel where that

Josh Lewis: money comes from.

Josh Lewis: You said two things that were really important. And I picked up on what Scott said with a bank loan officer. And what you said, I was doing an interview a week or so ago. Probably two weeks ago with a vetted VA realtor. And she mentioned I’ve closed deals with veterans United and you get with the right team.

Josh Lewis: It goes very smoothly. The problem is that. It’s very rare. It’s a small subset in there and that’s true of almost anything. Like we can sit here and tell you similar things about rocket mortgage. I know guys that it’s easier to say which kids in the call center, they don’t know anything, but I know guys that go there for three, four years, they look around, they go, Hey, I’m pretty smart.

Josh Lewis: I got this. And then they go out into the broker channel and you’re like, yeah, that’s a real good loan officer. And if you’ve got them while they were still at rocket, you got a very good loan officer. It’s just the numbers. Being in your favor and what I would say, where are the whole point of this conversation is the worst thing you can do is believe the marketing and look at your monthly bank statement from Navy fed and go, I’m going to Navy fed, or you search for VA loan.

Josh Lewis: And veterans United is always the top spot in the paid advertisement and go to them and don’t look and don’t compare your options. Jason, your example of saying, Hey, this guy came to me, I showed him I could save him money. I could save him an interest rate and he made an educated decision and said, I’m comfortable with my relationship here.

Josh Lewis: That’s all you can ask for is making an educated decision. Most people are going down that path and paying too much money and having a subpar experience without even giving themselves the opportunity. So if you’re inclined to do. Any of those places, a thousand percent start with them. Talk to them first, get the numbers from them, but make sure you’re talking to an independent professional that does a lot of VA loans that’s out in the market that works closely with realtors.

Josh Lewis: I happen to know again, without naming names here in Southern California agents just will not accept an offer. With one of those groups preapproval letters. So it’s and maybe that changes when there’s two offers on a house and they have to pick, but when there’s 12 offers on a house, they’re going to go, Hey, we ain’t, we’re not dealing with that.

Josh Lewis: I’ve had enough bad experiences with that. We’re not doing it. And the crazy thing is I’ve had clients. I need, she actually just texted while we’re on here. And I just send her an updated pre-approval or she came to me, she had talked to all four of them been pre-approved by all four of them and was unimpressed by all four of them.

Josh Lewis: They were all pretty similar. None of them were terrible. They were just it’s definitely an interesting step in the process. And again, just do your shopping and your education. And I would say that, Scott and I probably do a lot more conventional business than we do VA and FHA.

Josh Lewis: All the way around, but don’t talk to just one person, 70 something percent of borrowers will get the loans and the first person that they talk to. And to me that’s crazy. What are the odds that the first person you talked to was the best loan officer that was going to give you the best service, knowledge and advice and, or have the best terms for you?

Josh Lewis: It’s pretty unlikely. So I tell people, if you talk to three loan officers and you choose to work with one of the other. I didn’t do my job. I did not impress you. I did not show up and say, Hey, this is better advice, better terms, and feels like it’s going to be a better experience for me. So I’m never gonna be mad at someone for that.

Josh Lewis: And I think we would have much better outcomes throughout the industry. If everyone talked to at least two lenders before they moved on and made a decision.

Jason Sharon: I think that’s the basis of find my way home, right? We’re Jimmy the second or third or fourth or fifth person we’ve talked to.

Jason Sharon: I had a great conversation this evening in my driveway, as I was driving home, I got Alex, that was somebody I was talking to this lady. She had been turned down multiple times by multiple places. And I listened to her. I mastered the in-depth questions. There’s not a VA deal. And delays got good credit.

Jason Sharon: She just has no income and no assets. And when I say no income, she was, she’s making $1,400 a week. Social security. That’s her only income. And she has nothing saved. So she was calling about USD loans and whenever I got into, okay, I said, ma’am, I said, please take this. You’re coming from a humble heart.

Jason Sharon: I’m trying to be a friend here until you, your situation is never going to qualify. And here’s why, there’s rules on debt, income ratio limit, because that’s a risk tolerance in a loan, your risk calculation. And with your income, you’re only gonna be able to qualify for about a 60 or $70,000 road.

Jason Sharon: And you’re looking to buy your two, $300,000 piece of land and then build on it as it is just, it’s just not gonna work. And so if you understand just what the federal government requirements are for risk tolerance, that of stuff that gets bundled into mortgage backed securities and sold to wall street, which affects everybody.

Jason Sharon: That just isn’t gonna be their risk tolerance. And she’s wow. She was known as Everest. They just told me no. Or they just didn’t call me back. You’re the first person that cared enough to actually explain washers. I just need to reset. Yeah. She goes, I understand my dreams are just too big for my income.

Jason Sharon: I see. Yeah. Actually go get some, go get another job. So you get another job. We’ve got a whole nother equation, that we’re calculating from. So it’s just a matter of yet having someone that cares enough to actually take the time to explain. And that’s what we do here. If I’m only home is take the time to understand your unique situation and explain.

Jason Sharon: Yes. Yeah, absolutely. Can do this. I don’t know why that Chubb that said no, couldn’t do it. Or yeah, those guys that told, already. And it sucks that they didn’t tell you why, but here’s what you need to do in order for something to say yes.

Josh Lewis: Scott Shang the founder of find my way home has a saying that I’m sure I had heard it somewhere along the line, but he said it a lot when he and I first started working together seven or eight years ago.

Josh Lewis: And it says the answer is never, no, it’s not now. And there’s a responsibility with not knowing. Is explaining to someone why it’s not now and what would have to change for it to be yes, in the future. And a lot of these business models are predicated on generate a ton of leads. They’re not people they’re is just generate a ton of leads, filter through them as quickly as you can, and find the ones that are going to result in the commission.

Josh Lewis: The reality is everyone of these people are people they’re human beings, and most people can handle the truth. I’ve had some crazy people that I’ve gone through and explained to them that on a $30,000 a year salary, they can’t buy a $600,000 house in Southern California. And they tell me I’m wrong.

Josh Lewis: That’s the exception, 95, 98, 99 filler. Just like what you said, Jason, they’re going to thank you for breaking it down and explaining it to them. And it’s not that hard. It takes 2, 3, 5 minutes of your time to leave them in a better place so that they’re not continuing to make more calls hoping for an answer that just doesn’t exist.

Josh Lewis: So we’ve been going a little bit longer than an hour here. I’m sure we could talk about VA loans for the rest of the night, but we’ve covered our main bullet points of what we wanted people to know, and to educate them and empower them to make better decisions and make it more likely that they’re getting their offers accepted out in this market and getting the best terms.

Josh Lewis: But before we say goodbye for the night, I want to get both of you guys in the opportunity. Jason, anything else that you would like to throw out there? If you had the opportunity to talk to a hypothetical of VA borrower out there, what would you like to say?

Jason Sharon: What I say is get educated. The whole trust, but verify thing is so important, going on with that depressive regular, you’ve got to understand what it is you’re buying, before you buy it and blown as a product, you’re buying a loan, you’re choosing your loan officer.

Jason Sharon: You’re choosing your loan terms. You’ve got to understand what it is. You got to get educated, your research, Jordan groups. I wrote a book called VA mortgage declassified with some Amazon to contact me. I’ll send you a free copy, get educated before you make any significant.

Josh Lewis: And how about yourself, Scott?

Josh Lewis: Anything else? Yeah. Yeah.

Scott Valins: No, I think Jason’s spot on, but I go a step further and say, talk to other veterans, veterans, they band together. They’re, they’ve been through things together and often get referrals from other veterans. That’s one of the best, I would say my past VA clients probably ever for our, the best referral sources for other veterans than any other, like non VA client.

Scott Valins: But even if they’re not coming to me through a referral, or I’m not even talking to them, the best thing you can do is speak to your buddies, your friends and learn about what they went through, what their experience was like get a layman’s term, low down on what this thing’s all about.

Scott Valins: And then also be patient. I think, It’s not so much a message for just veterans, but that’s the subject. I think veterans, they get, they don’t necessarily control or active duty. Members don’t necessarily control where their next location is and when it is, and they’re under a lot more pressure to find a place to live.

Scott Valins: If they’re not living on a base when they move to their next destination. And before we had this housing market crunch, it was usually. If you have enough time and a lot of, it, you’re organized by the time you move to a place or shortly thereafter, you can buy a home, get your VA loan and move in.

Scott Valins: And now it’s a lot harder and people’s rents are going up and things like that. It’s a tough time out there. But I think if you’re patient and you don’t you’re set up properly and you’ve done your research and you have a good agent representing and you, your opportunity will come to buy a home and you’ll end up in a house with a great VA loan.

Scott Valins: And you’ll happy to live happily ever after, but things change quickly. Things turn quickly. Interest rates turned very quick on us here. The housing crunch and the supply shortage all came, but everything moves into. And I think, in due time, things will moderate and the marketplace will be more balanced with buyers and sellers.

Scott Valins: Be optimistic and be patient and your opportunity.

Josh Lewis: All of that. Great advice. I think any veteran looking at entering the housing market would do well to have watch this hour. So hopefully we can get it out and then get it in front of folks. On the topic that Jason was saying of, educate yourself on it through a couple of resources up here, obviously find my way home.

Josh Lewis: If you’re seeing this on YouTube or you’re not on our website find my way We have a network of expert lenders around the country. It’s not just the three of us. We’ve got nearly every state covered with people who can give you this level of knowledge, expertise, and Karen. All of that. So if you want to get connected, you want to ask a question, go out there.

Josh Lewis: If you’re a veteran and you want to get involved in the conversation around VA loans, check out Veta VA. You do have to put in a request, but within a day or so, they’ll get you approved. You can get in there and a massive library of questions answered and folks just like us in there. Moderating questions and answers all day, every day.

Josh Lewis: Gentlemen, I appreciate you taking time from your busy evening. Appreciate you giving and sharing your wisdom. And I’m sure we’ll be back here again in the near future. Answer some more questions. Good. Hanging out with you guys. Have a good night guys tonight.

About the Author

Scott Schang

A 20+ year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues and making sense of complicated real estate and mortgage topics on this website since 2007

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