Does VA consider a loss on entitlement a " collectable debt "?

The short answer is "no".. Each state is different as to whether or not they are a "Deficiency Judgement" state or not.. Here in Arizona, if you have a loan on a home that was foreclosed, then when the lender gets possession of the property, in most instances, they cannot come after you for any losses as a result of the foreclosure. But this is not the case with every state so you should probably check the laws in your state. If your in a "Non-Deficiency" state then VA will not come after you for the losses, and its even possible to obtain another VA loan in the future. Your VA entitlement is based on the maximum insurance for up to $417K in purchase price. Example: you purchased a home for $250K using VA financing, and lost it to foreclosure. Assuming you have met all other eligibility requirements, you can use VA again for a home up to $167K (417K-250K=167K) and no down payment would be necessary.. if you purchase using VA and the price of home is greater than the above example of $167K, then you would have to put 25% of the difference. Example: your maximum remaining entitlement is $167K, but the purchase price for the new home is $187K, or $20K more.. you would need 25% of the $20,000 or $5000 down to use VA financing.. I hope this answers your question. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

I see William Acres answered your question well. You do need to check with someone who knows whether Colorado is a "deficiency judgment" state. Due to the nation's economy nearly imploding during the height of the economic collapse a lot of policies were put in place to protect borrowers, but these can change. Now, it is always good for people to ask their lender about their policy if they believe they might be forced to go to foreclosure. Bankruptcy often resolves that issue of becoming a collectable debt. That goes for a short sale as well...check with the lender on what their policy will be if they agree to a short sale of one's property.

No. I am here in Colorado and it only effects you from using a VA loan to finance a new home. I would need to see your certificate of eligibility(COE) updated to find out if you have enough entitlement to purchase using VA. You can find that COE form online at Va.gov. VA doesn't currently actively report these items to your credit report. Or contact me and I can assist. Jacob Call me or complete my online loan application at jacobdenver.com 720.210.7898

When doing a new VA loan, and you have a prior VA loan with a loss, that will result in a reduction of your VA entitlement, which means you may only qualify for a smaller loan, or there may be no entitle left at all, which means NO new VA loan - unless you pay VA back their loss. For VA loans in MN, WI, or SD, visit www.VA-IRRRL-Loan-MN.com