Too often, loans from the U.S. Department of Veterans Affairs (VA) carry a stigma. That shouldn’t be the case. Instead, mortgage originators should educate their clients, referral partners and themselves about these loans programs that are so important for military borrowers.
It’s a refrain we hear often — and have likely used ourselves — when speaking with a military veteran: “Thank you for your service.” It’s a simple courtesy. A sign of respect and appreciation for the sacrifices that military members make every day in the course of doing their jobs.
The vast majority of Americans are genuinely thankful for those sacrifices (and for the men and women who make them), so it is all the more puzzling why a stigma exists in real estate around the value and validity of VA loans. Many sellers and agents assume a VA loan-backed offer is somehow less valuable than one backed by a more conventional loan. Therefore, it is less likely to be accepted by sellers.
The real question is why? Is it a misunderstanding? Is it a lack of education or awareness about how these loans work? Ask real estate agents and the answer is: “Lenders don’t know how to do VA home loans. If they ever figure it out, we would be happy to accept their offers.” In other words, the problem isn’t real estate agents or sellers. The problem lies with mortgage professionals.
To correct this and make meaningful change in shifting perception about these key types of loans, lenders and originators need to stop looking to others and instead start looking inward at their own people and practices. An education gap around VA loans exists, but it is mortgage professionals who need to look in the mirror, take the initiative and do the work to address this gap.
This means being smarter about educating the real estate community on VA loans, working with referral partners to dispel stigmas around VA loans, and being an advocate for veterans by consistently explaining to your partners why it is in their best interest to leverage these loans and increase business. Before that can take place, however, lenders and originators need to commit.
To truly make a difference and help veterans, lenders and originators need to stop worrying about being a “salesperson,” and start learning how to become educators and leaders. The most effective and successful military lenders recognize that it’s ultimately not about the money — it’s about doing what is best for the veteran.
Begin with that premise and everything else will start to fall in line. As an originator or lender, every time you process a VA loan, ask yourself, “Am I doing the right thing for the veteran?” The path won’t always be easy — and that’s OK. Adapt, evolve and persevere. If you’re working with veterans, you’ve got perfect role models to learn from.
If you decide that you would like to do more to serve our nation’s veterans in the housing market, ask yourself some questions: Do you have the heart? Are you teachable? Do you have good habits? Do you truly care about putting a veteran’s needs before your own? Can you teach others while creating and delivering a strong message that people will follow? Do your VA-financed transactions close smoothly? If not, why?
The first and most important step in the process is to be honest with yourself about the answers to these questions. Then you have to decide how you intend to change your current mindset and professional approach to address them.
Once you make the all-important commitment to fully support military lending, the next step is to familiarize yourself with the tips and best practices that can help you become a true military-lending authority. This includes learning the language used by the military.
For instance, lenders are required to get proof of a veteran’s services during the lending process. This is called a certificate of eligibility (COE). Truly understanding how to get a COE means learning the differences between active-duty personnel, active-duty reserve, National Guard and veterans. It means making sure you have a firm grasp of what forms, contacts and portals you need to use, as well as what processes you need to follow.
Understand how to recognize key information on military forms, including pay and duty assignments. Make sure you can read and interpret a leave and earnings statement (LES), which is essentially the military’s pay stub. It’s critical to understand military orders and how they relate to pay-stub housing allowances. Be sure to also know the difference between a DD214 and a statement of service.
Consider the VA 26-7, the lender’s handbook for VA loans, the law of the land. In this case, the law of the land is more about what you can’t do than what you can do. If the VA doesn’t explicitly say in the handbook that you cannot do something, then it is permissible. The VA empowers mortgage companies to make prudent decisions, which is why it is critical to learn and understand how to work closely and collaboratively alongside regional loan centers and mortgage investors.
Closing a VA loan is great, but truly becoming
a VA loan specialist is even better.
You can’t dispel common myths and misconceptions surrounding VA home loans unless you first understand what they are and where they come from. Familiarize yourself with common complaints, especially those myths that have hardened into mistaken conventional wisdom.
Think critically about not only how to respond with correct information, but how to get that messaging out to veterans and to the real estate community. Instead of reflexively blaming the VA for poor lender practices that cause delays or last-minute denials, ask yourself what concrete steps you can take to be part of the solution.
Don’t just learn the VA loan basics and consider your job done. As in everything else you do, make sure you practice your craft and are proactive about continuing to learn and grow. Eat, sleep and breathe the VA 26-7. Practice VA loan processes daily.
Connect with the VA regional loan centers often and dial the national 877 number as much as possible. Sign up to receive any VA circular changes. Make it a priority to attend the annual VA lenders conference. Teach classes, make videos, post on social media, and never stop encouraging those around you to do better and be better. Closing a VA loan is great, but truly becoming a VA loan specialist is even better.
Finally, join a community of like-minded servants and champions. Finding the right community for you means surrounding yourself with those who share your passion for service, for helping veterans, and for educating and empowering both themselves and others. If you are not currently in an environment that allows you to connect with champions who truly want to serve veterans, you may be missing out on a wonderful opportunity.
• • •
So, yes, thank a veteran for their service. It’s the polite thing to do. But you also should commit to helping veterans take advantage of the lending products and perks they have earned through that service — simply because it’s the right thing to do.