The American Bankers Association today joined eight other associations in urging the Department of Veterans Affairs to take steps to implement President Trump’s recent executive order on promoting mortgage access credit, including making changes to help veterans and their families keep their homes.
Among other things, Trump’s March 13 order directed the VA to explore aligning appraisal standards between the Federal Housing Administration and VA Home Loan Program “where risk is comparable.”
In their letter, the associations recommended modernizing the VA collateral valuation process to align it with the collateral valuation standards established by Fannie Mae and Freddie Mac or the FHA.
“We believe this change could be one of the most direct and effective ways to remedy the sometimes negative market perception of the VA Home Loan Guaranty Program,” they said. “Of equal importance, an aligned approach to valuation would improve the utilization and delivery of the VA home loan benefit.”
Another opportunity to reduce the friction associated with the VA home loan program would be to reduce the costs and wait times that are associated with the program, which present significant challenges in a capacity-constrained mortgage market, the associations said. They also urged the VA to expand the use of alternative valuation methods, such as adopting the new Uniform Appraisal Dataset 3.6.
