VA Mortgage Loan Scams

A VA mortgage loan is guaranteed by Veterans Administration. These loans are extended only to the veterans. The surviving spouses of veterans are also entitled to receive the loan guaranteed by the VA. This loan allows veterans to own a home of their own by making zero down payments.

In order to avail the veteran mortgage loan, you need to qualify and the eligibility criteria may vary from one person to another. The difference may be due to duration for which you were in service or type of military service you were engaged in. You can avail a VA mortgage loan of up to USD$417,000. In few areas the amount can be higher. If you are a potential home buyer, you can avail a 100% mortgage loan without shelling out private mortgage insurance. In case you are a homeowner already, you can avail 90% for refinancing.

VA mortgage loans are issued by qualified lenders and banks. However, recently several instances of VA mortgage loan scams have been reported.

Scenario 1
A real estate broker was sent to prison for victimizing innocent people who had availed VA mortgage loans. The incident occurred in Atlanta when the real estate broker misappropriated approximately USD$900,000. She operated in the Atlanta area and arranged for at least 20 real estate transactions offered by Veteran Administration's Lendee Vendor Program. She operated under 3 different names. She had made false documents, bank records, wage statements and submitted to the VA so that the VA mortgage loans get approved. Her main intention was to help veterans get a loan even if they didn't qualify for one.

Scenario 2
In another instance involving VA mortgage loans, an officer of the VA Regional Loan Office was found guilty of carrying out fraudulent activities. The main work of the officer was to hire contractors for the repair work and maintenance of residential property, the VA intended to buy if the veterans fell behind on payments. These loans were only partially guaranteed by the VA. The officer was imprisoned for a period of 63 months. He was arrested on the charges that he had accepted bribe from contractors and hired their services for the maintenance work even though the quality of work they would be doing wasn't good. The contractors were paid as much as USD$4 million over a period of 5 years. In return, the officer received cash payments of more than USD$100,000. Since the incidence of VA mortgage loan scams is on the rise, every possible effort is being made to minimize misappropriation of funds.