Expiration of VA Authority to Guarantee Adjustable Rate Mortgages

Date: 9/9/08

The Department of Veterans Affairs released the following announcement:

Unless Congress extends the Department of Veterans Affairs’ authority to guarantee adjustable rate mortgages (ARMs) and hybrid adjustable rate mortgages (HARMs), these loan types will expire on September 30, 2008.  Lenders should not accept applications for VA-guaranteed ARMs and HARMs after September 30, 2008. Lenders with an ARM or HARM application dated September 30, 2008 or earlier may obtain a VA Loan Guaranty Certificate so long as the loan closes within a reasonable time and satisfies all other VA program requirements.

Investors such as SunTrust Mortgage have already released notices about the upcoming expiration of their own VA ARM programs.  Others are expected to follow suit.

MBS-ProClose will release additional information, if an extension is likely.