(7) Failure to keep agreement.
If the mortgagor fails to make payments required by the agreement and the department determines that modification of the agreement is not warranted, the department may notify the mortgagor that the agreement has been terminated and accelerate the primary loan balance.
VA 4.13 Note
A special forbearance/repayment agreement form is required in connection with the creation of s. VA 4.13
. A copy of this form is available at the department of veterans affairs.
VA 4.13 History
Cr. Register, May, 2000, No. 533
, eff. 6-1-00.
Home improvement loan program. VA 4.14(1)(1)
This section applies only to the program under s. 45.34 (1) (c)
, Stats. This section applies in conjunction with other provisions of this chapter, except that the provisions of s. VA 4.03 (3)
do not apply to this section. This section supercedes any inconsistent provision of this chapter with respect to the program under s. 45.34 (1) (c)
"Date of application" means the date a complete loan application with supporting documents is received by the department.
"Loan" means a home improvement loan as authorized by s. 45.34 (1) (c)
, Stats., for the purpose of this subchapter.
"Total debt payments" means 1/12 of an applicant's monthly [annual] housing expense and monthly repayments required on debts with 13 or more remaining monthly payments due at the time of application for a home improvement loan program loan. "Total debt payments" includes 5% of the applicant's total indebtedness on which regular monthly payments are not required except when the applicant has sufficient verified assets to repay the indebtedness.
VA 4.14 Note
Note: It is the intent of the department to use 1/12 of the annual housing expense rather than monthly as sub. (2) (c) reads.
The applicant's eligibility to participate in the program shall be established prior to the approval of the loan by the department.
An application for a loan shall be on a form approved by the department and shall include documentation of income, verification of adequate security and other items as may be required by the department. An application shall be signed by the applicant or submitted electronically after obtaining a valid log-on ID and password. Applications for loans by applicants who are married and not separated or in the process of obtaining a divorce shall be completed and signed by the applicant's spouse. If the application is submitted electronically, the spouse does not need to sign the application. Applications may be prepared with the assistance of and submitted through the office of a county veterans service officer or other representative as approved by the department or may be submitted directly to the department. Loan applications that are not complete may not be accepted by the department. A loan application which has been accepted by the department, but which is determined to lack the necessary information or documentation for the department to approve a loan, shall be denied, unless the applicant corrects the deficiency within 30 days' notice of the deficiency by the department to the county veterans service office or to the applicant.
An applicant's current monthly income shall be verified. Acceptable verification of current monthly income may be any of the following:
Copies of check stubs from the applicant's employment for a recent month within 3 months of the date of application.
A copy of the prior year's income tax returns except if the applicant's employer, type of employment or method of compensation has changed. Applicants verifying their income by the prior year's income tax returns shall submit a complete copy of the state and federal tax return including all schedules.
An award letter or copy of a check of unemployment compensation. Unemployment compensation may be considered income when it is received for regular or seasonal layoffs from the applicant's current employment.
A business plan and professionally prepared profit and loss statement of income to be derived by an applicant from a new business which the applicant is establishing or an existing business the applicant is purchasing.
A profit and loss statement for at least 6 of the 12 months immediately preceding the loan application date of the income of a self employed applicant.
Depreciation as listed on an applicant's federal tax return may be used as income at the request of the applicant.
All loans shall be amortized on a monthly basis and the term of the loan shall be at least 1 year and may not exceed 15 years. The department may set loan amortization terms based upon the loan amount.
If an applicant's total debt payments exceed 35% of the applicant's current monthly income, the application shall be denied unless the applicant has a history of excellent debt service combined with either a demonstrated ability to accumulate savings, at least 15% equity in real estate or such other factors as the department finds to be relevant to the applicant's ability and motivation to make higher debt service payments.
The department shall consider the income, assets and debts of a co-applicant.
VA 4.14(4)(a)(a) Guarantors.
The department may accept as adequate security the guarantee of home improvement loan program loan promissory notes by creditworthy and financially acceptable guarantors who are not the spouse of the applicant and who are Wisconsin residents. Guarantors are subject to the same underwriting criteria as the applicant and the department may request verification of information submitted. There must be at least 1 guarantor on guaranteed home improvement loan promissory notes. No employee of the department, no county veterans service officer and no other person in any way connected with the administrative duties of the department or serving in an advisory capacity thereto may be accepted as guarantor on any loan unless the applicant is a member of the guarantor's immediate family. Any other Wisconsin resident who is determined by the department to be financially responsible and whose joining in the obligation provides adequate security may be accepted as a guarantor.
(b) Real estate security.
The department may accept the primary residence of the applicant as security if the applicant presents evidence of at least 10% equity therein after the home improvement loan program loan has been made. Possession of merchantable title to the primary residence by the applicant is required. If the title to the primary residence is held in more than one name, all parties with an interest in the real estate shall sign the mortgage.
If an appraisal is being used to determine the value an appraiser, selected by the applicant and licensed by the Wisconsin department of safety and professional services, shall perform the appraisal and complete the appraisal form prescribed by the department. The appraisal may include the value added by the improvements or one half of the cost of the proposed improvements may be added to an appraisal that does not include the value for the improvements. The applicant is responsible for payment of the appraisal expenses.
If the applicant submits an appraisal the appraisal is advisory only. The department may consider age of the appraisal, equity established by the appraisal, condition of the property or market value established by the appraisal in evaluating the appraisal submitted. The department may determine the value of properties for its purposes by means of property inspection by department representatives, by obtaining appraisal reports at its own expense, or by such other means as it may deem practical.
(d) Alternate value establishment.
The department may accept the current equalized assessed value or fair market value as stated on the last year's property tax statement plus one half of the cost of the proposed improvements as the cost and value of the residence for all purposes. In order to establish the value of the proposed improvement for the purpose of determining the increased equity value, the applicant shall submit a description of the project and estimates for the work or an appraisal that incorporates the proposed improvements.
(e) Letter title report.
A letter title report completed by a licensed title company or a licensed attorney, or an individual authorized by the department and subject to restrictions imposed by the department, verifying the nature and amount of all mortgages, liens, and other claims outstanding against the applicant's primary residence where the applicant offers a residence as security for a home improvement loan program loan is required.
(f) Subordination agreement and partial release of mortgage.
The department may execute a subordination agreement or release a portion of the property providing security for its mortgage if the department verifies that the mortgagor's equity in the property secured by the mortgage is greater than 10% after the execution of the subordination agreement or partial release, the applicant is current on the loan, the applicant meets current underwriting criteria, and the repayment history for the 6 months immediately preceding the request has been satisfactory on the loan.
VA 4.14 History
Cr. Register, May, 2000, No. 533
, eff. 6-1-00; CR 05-008
: am. (1), (2) (a), (3) (b) and (d), (4) (a), (c) 1. and (d) to (f), r. (3) (g) Register May 2005 No. 593
, eff. 6-1-05; correction in (4) (c) 1. made under s. 13.92 (4) (b) 6.
, Stats., Register February 2012 No. 674