A borrower with a VA loan defaults and the property goes through foreclosure. The lender recovers only 70% of the outstanding loan balance from the sale. Who is responsible for covering the remaining 30% loss?
Correct Answer
C) The Department of Veterans Affairs guarantee program
While Ginnie Mae guarantees the timely payment of principal and interest on MBS backed by government loans, the actual loan guarantee comes from the originating agency. For VA loans, the Department of Veterans Affairs provides the loan guarantee that covers losses, not Ginnie Mae directly.
Why This Is the Correct Answer
While Ginnie Mae guarantees the timely payment of principal and interest on MBS backed by government loans, the actual loan guarantee comes from the originating agency. For VA loans, the Department of Veterans Affairs provides the loan guarantee that covers losses, not Ginnie Mae directly.
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