Ginnie Mae, a government-owned corporation that guarantees some kinds of mortgage securities, and the VA have formed a “Lender Abuse Task Force,” according to a Wall Street Journal
report. The aim is to target lenders who push veterans to refinance their home loans
unnecessarily, sometimes sticking borrowers with thousands of dollars in fees they wouldn’t have had otherwise.
Michael Bright, Ginnie Mae’s acting president, told the Journal that refi “churning” – pushing loans to be refinanced more often than usual – has consequences across the mortgage industry. Churning, Bright said, could cause higher prices for borrowers and uncertainty for investors.
Ginnie Mae has already enacted ruled to curb churning this year, according to the Journal
. But Bright wrote in a recent letter to Sen. Elizabeth Warren that some lenders were actively evading efforts to stem rapid refinancing.
“When people say the mortgage industry has learned its lesson, this seems to suggest that that may not be the case,” he said.
The new task force plans to discuss refi practices with lenders it believes have a high “churn” rate. It’s also considering taking legal action against some lenders, the Journal
Company makes construction-to-permanent loans available for military families
Only a fraction of veterans take advantage of VA loans
Ginnie Mae and the Department of Veterans Affairs are cracking down on unscrupulous