Jason Sharon is a 12-year veteran of the US Navy. As a veteran homeowner, he gets a pamphlet in the mail almost every day pushing him to refi with a VA loan. Jason Sharon is also a mortgage professional, so he reads the fine print.
“Every one of those places is just really screwing veterans,” he said. “They’ll offer you a 2.25% rate, but it’ll cost you two points origination.”
Sharon has done some mailing campaigns of his own for veterans, sending out 20,000 postcards that simply said: “no bull-crap fees.” Within two weeks he secured eight loans from the postcards.
Sharon’s business is around 65% VA loans. The broker/owner at Home Loans Inc. in Charleston, SC believes that this industry has preyed on veterans at times, taking advantage of the trust in authority they were taught during service. He lamented the marketing strategy of putting a retired rear admiral on a mailout, making veterans believe a company will do right by them when they’ll really be buffeted by complex fee structures. Sharon told MPA that the industry has to do a better job serving veterans, a process that begins with education.
“It’s about educating one person at a time,” Sharon said. “In a Facebook group called Vetted VA, we’re trying hard to educate loan officers, veterans, and spouses. We have over 20,000 people in that group now and the amount of good information being given out there every day is just tremendous…We’re in the process of training for loan officers for VA loans, to try to improve their base level knowledge, too.”
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Sharon explained that for loan officers to better serve VA borrowers, they need to overcome a few misconceptions about the program. For one, while the VA issues an insurance policy for around 25% of the loan, the VA is not lending the money. Rather, the money will come from Ginnie Mae bond holders. Sharon also explained that even though many VA loans come with no money down and, effectively, no minimum credit score, they’re among the best-performing loans out there, with some of the lowest foreclosure rates. Thanks to that performance, brokers working with VA programs don’t have a hard time selling these loans off.
His biggest piece of advice to originators looking to better serve veterans is to read the guidelines. Despite building his business around VA loans, and even writing a book on the subject of VA loans, Sharon still takes at least 15 minutes a day to review lending guidelines.
While Sharon sees real opportunity for originators learning the VA channel, especially in areas with a large percentage of veterans like South Carolina, he noted there are a few easy mistakes originators make. While VA loans don’t have a DTI limit, he explained that the program does have a residual income calculation. Originators must do that calculation upfront. The other major mistake is to not confirm a borrower’s eligibility at pre-qualification. It’s a step that takes two minutes and prevents the heartaches and headaches of telling a borrower who just paid $1,000 in appraisal and inspection fees that they don’t qualify because they were dishonorably discharged in the ‘70s.
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Sharon believes that for this industry to serve veterans better, loan officers need to fully understand how VA loans work. They can learn that, he explained, by doing them.
“I think it’s just dedicating yourself to the VA loan and getting smart on it,” Sharon said. “Whenever you’re talking to referral partners you’re setting yourself up as the VA expert or the go-to VA guy. Then, as you get each loan, you’ll get a little bit smarter on each loan and eventually you’re really good at them.”