WASHINGTON, D.C. – In a letter today to Sen. Elizabeth Warren (D-MA), Ginnie Mae outlines its actions to curb VA refinance speeds and aggressive marketing by some VA approved lenders. As Ginnie Mae notes in its letter, rapid refinance and loan churning was recognized as a problem in its VA portfolio last year. This led to Ginnie Mae’s initial measures to change its program rules to address the issue. These initial measures were successful in stopping these practices with many lenders.
Unfortunately, some lenders have actively worked to evade those new rules by changing their tactics to continue questionable lending practices that create downward pressure on Ginnie Mae securities and ultimately harm veterans by increasing borrowing costs. As the next step in the process to fully solve this issue, Ginnie Mae and VA have formed the “Lender Abuse Task Force” to continue and intensify its work on this issue.
Ginnie Mae’s efforts, along with its partners in government, industry, Congress and other stakeholders, seek to fully root out these questionable lending practices that harm veterans and harm the Ginnie Mae security, which also notably means harm to FHA and other government backed loan program borrowers.
Ginnie Mae’s response to Sen Warren can be found here: Ginnie Mae Letter to Sen. Warren
About Ginnie Mae
Ginnie Mae is a wholly-owned government corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country. Ginnie Mae mortgage backed securities MBS programs directly support housing finance programs administered by the Federal Housing Administration, the Department of Veterans Affairs, the HUD Office of Public and Indian Housing, and the Department of Agriculture Rural Housing Service. Ginnie Mae is the only MBS to carry the explicit full faith and credit of the United States Government.