Some changes happened at the VA last year and it wasn't for the better. Mired in bad public relations, the regional home loan center revamped their VA condominium approval process and made it more user friendly for lenders who submit good condominium approvals. As such, we have changed our position on attorney opinion letters.
For the past eight years, we have submitted an secured VA condominium approval for over 120 California condominium complexes. We encouraged our clients to spend the $1500, to secure an attorney opinion letter (usually costs $2500-$3500) to expedite the VA condominium approval process. The process has two components to it: financial review (performed by VA regional home loan center) and legal review (performed by an outside counsel). We encouraged attorney opinion letters because we felt that the regional VA home loan center rushed the submission package to outside counsel when it was attached. More importantly, we felt that the regional counsel accepted the attorney opinion letter and approved the submission more quickly.
We no longer think the attorney opinion letter trumps the well-packaged submission package. We have submitted four complexes in the past 120 days--one had an attorney opinion letter and the other three did not. The submission with the attorney opinion letter took 29 days for approval. The three other submissions were approved in 22 days to 40 days. When we drilled down to figure out why some were approved more quickly than others, we noticed one thing-- when we used our proprietary condominium questionnaire, the packages were sent out for legal review within ten days of submission. In each of the four files, the legal review was performed as quickly as 4 days (the one with the attorney opinion letter) and as long as 12 days (all other three).
What this means is that an attorney opinion letter can save about 7-10 days on the process (at best). Our new policy then is to advise clients that an attorney opinion letter will be requested only after the submission package is at 28 days. We will be requiring that our proprietary condominium questionnaire is completed prior to submission.
Our proprietary condominium questionnaire organizes the financial documents and directly answers the questions which the VA regional home loan center and outside counsel need. When accompanied with the proper financial and legal documents, the submission package gets to the outside counsel by day 14 of submission. We think two weeks is sufficient enough time for the outside counsel to review and issue the final complex approval.
The attorney opinion letter can help us if we find that the submission package is either (a) at the regional home loan center for more than 14 days and (b) not approved by regional counsel by day 28. We now see it is an "emergency provision" and not a necessity.
This is good news for veterans. The VA, for all of its bad publicity, really tried to streamline the process for lenders who know how to package VA condominium approvals. in 2016, this may save our veteran buyers a $1500 fee.
Please call Brian Brady at 858-777-9751 eith any questions.