How Do You “Stack-Up” on VA Loans?

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The Veterans Administration (VA) has a new mandatory “stacking order” for loan files selected by the VA for a full file loan review.  This new stacking order becomes effective for loan files selected for review on, or after, June 1, 2016.

It is important to note that there are two separate stacking order documents that have been created by the VA.  The new stacking order for purchase or cash-out refinance loans is attached to Circular Letter 26-16-12, dated April 11, 2016, which outlines the Circular Letter as “Exhibit A” while the new stacking order for Interest Rate Reduction Refinance Loans (IRRRLs) is attached as “Exhibit B”.

Lenders, in my opinion, should be proactive in providing these new stacking order checklists to their staff (especially the post-closing folks) as soon as possible and implement procedures to assure compliance with the new stacking order when it becomes mandatory in June.

In this regard, many of my previous Blog Posts have dealt with the GSEs and Agencies’ (i.e. HUD, VA, and USDA) continued complaints about incomplete loan files and data integrity deficiencies.

These recurring problems result in a huge drain on resources for both the lender and the GSEs & Agencies’ staff.  If loan files are complete and the documents are in the correct stacking order – there will be less time spent in communicating and addressing loan file deficiencies which is a win-win for all parties involved.

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Click here to gain access to VA’s Circular Letters.  It is highly recommended that you print-out Circular Letter 26-16-12 along with the two attached Exhibits:

The game is changing – you need to play different!

About the Author

Gerry Glavey

Gerard (Gerry) Glavey is Senior Vice President / Chief Credit Officer for LoanLogics. Gerry has decades of experience working in residential mortgage credit and compliance and brings insights that few in the industry can match. In his role, he develops new services and provides support for all post close quality control and quality assurance, pre-close quality control, due diligence services, and document processing services. He spent 37 years with the US Department of Housing and Urban Development, where most recently he was the Director, Processing and Underwriting Division for the Home Ownership Center (HOC) in Philadelphia. In this capacity, Mr. Glavey was responsible for the administration of all HUD/FHA Single Family Loan Origination activities, including underwriting, appraisal and endorsement for the 16 state jurisdiction of this HOC.