VA appraisal process has kept veterans out of homes, paper says

The VA loan, and more specifically, the appraisal process it triggers, is getting the cold shoulder in Hampton Roads, an area regarded by some as the military capital of the nation, a disturbing piece in the Virginian-Pilot, Hampton Roads' daily, reported.

Some real estate agents are waving off buyers who qualify for these mortgages with implicit language such as "conventional financing only'' on listings that can be found in the local multiple listing service REIN, Inc. Other agents are more explicit and boldly writing "NO VA'' or "NO VA, NO FHA LOANS'' on the listings, the paper said.

"How do you go to a Marine who was in Basra six weeks ago and tell him you don't want his offer?'' Tom Lira, a loan officer with AccuBank Mortgage in Chesapeake, asked. "When they start posting that FHA and VA contracts aren't welcome, it's against the American way. There's something terribly unfair and unfriendly about it.''

In a recent training video VA fee appraisers nationwide must watch as part of their training, Hampton Roads is cited as a "prime example" of "the real estate community showing an unwillingness to deal with VA appraisals."

William "Sandy" Stewart, chief of construction and valuation for the VA, said that he launched a pilot project in Hampton Roads in 2002 that is beginning to pay dividends now that it is national policy. As we reported here, VA appraisers are encouraged to contact the lender or listing agent when they can't justify a property value at the sales price. This allows agents to provide different comparables and data so appraisers can consider adjusting the values. Disputed values now must be reviewed and resolved in five days, not two weeks. And typically the disputes are resolved in 24 hours, often in favor of the deal, Stewart said.