Ginnie Mae and the Department of Veterans Affairs (VA) recently announced the shaping of the “Joint Ginnie Mae – VA Refinance Loan Task Force,” in an effort to address loan churning and repeated refinancing issues.
Specifically, the task force is set to focus on examining critical issues, important data, and lender behaviors related to refinancing loans. In addition, the task force will "determine what program and policy changes should be made by the agencies" as a way to ensure these loans do not pose an "undue risk or burden to Veterans or the American taxpayer."
According to the enterprise, this task force has begun its efforts in two ways. First, by examining data and information to ensure loans provide a “net tangible benefit” to Veteran-borrowers. Second, the task force is considering to establishing time frames regarding “recoupment of fees associated with refinancing loans.”
The purpose of the task force is to also determine the effects if implementing stronger seasoning requirements for VA-guaranteed loans that are securitized into Ginnie Mae Mortgage Backed Security pools, according to Ginnie Mae’s release.
Furthermore, the task force will “work to ensure Veterans understand the costs and benefits of refinancing, and ensure robust borrower outreach and education programs are augmented for this purpose.”
Last year, the Consumer Financial Protection Bureau revealed a snapshot of service member complaints and issues related to VA mortgage refinancing. In light of these issues, the task force will examine aggressive and misleading refinancing propositions.
The release notes that Ginnie Mae and the VA will continue to work together until concrete solutions have been implemented to eliminate lender behavior that is unhelpful to Veterans and harmful to the American taxpayer.