Growing Concerns Over VA Loan Churning

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Posted To: MND NewsWire

A Ginnie Mae official told Congress this week that his agency has growing concerns over the incidence of “loan churning” in the VA mortgage program. Michel R. Bright, Ginnie Mae’s Executive Vice President and COO was among four mortgage industry experts testifying about the issue to the House Committee on Veterans Affairs on Wednesday. Bright said since the loan churn problem became evident, Ginnie Mae has realized it could ultimately harm borrowers in the form of higher interest rates and has the potential to cause problems with investors that could spill over into FHA and USDA loan programs as well. Starting in early 2016, the agency and its investors noted loan prepayment rates were increasing and serial refinancings were occurring with greater frequency in the VA mortgages Ginnie Mae guarantees…(read more)

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