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On the Hill Episode 18: John Bell, Veterans Affairs Home Loan Guaranty Program

In the latest episode of On the Hill, Tim Rood, SitusAMC’s Head of Government and Industry Relations, talks with John Bell, Executive Director of the Department of Veterans Affairs Home Loan Guaranty program. Bell started his current role in June 2022 after a dozen years with the VA, an extensive career in the mortgage industry and his service in the Navy.  

Bell talks about how the VA program’s share of the total single-family market rose to about 12% today from 1% after the Great Financial Crisis, by increasing participation among top lenders and servicers, and making the mortgage a product of choice among veteran borrowers. “Investors gravitate towards stability, and marketability,” he said. “As you continue to change your programs, you change where the flag is placed for them. That creates anxiety, higher pricing and fewer investors that want to buy into mortgage-backed securities. We're creating this atmosphere where we're setting the guardrails, and where the guardrails aren't changing much. And when they do change, they change for the right reasons. And then we can show we can show those reasons to the community.” 

Rood and Bell also discussed the VA’s two-year-old modernization initiative, designed to increase the exchange of data and improve transparency and efficiency. “Next year, we will have access to 100% of the data from all loans that are closed,” Bell said. “We will be feeding that back into the industry, allowing lenders to see how they are benchmarking against other lenders. We think if we do that, then our borrowers are going to see decreased pricing, better service and a more transparent atmosphere when they go to shop.”

Bell also talked about the long-term impacts of the COVID-19 pandemic, what he expects in the year ahead in terms of overall loan performance, and what VA leadership is contemplating to create a soft landing in case of a credit event.  

Since 1944, the VA program has backed more than 25 million loans, including more than 1.2 million mortgages with a combined loan balance of $375 billion in 2020. The VA is projected to guarantee $268 billion in mortgages in fiscal year 2022. 

Listen to the podcast above.