Ginnie Mae Outlines Action on VA Refinance Speeds

WASHINGTON, D.C. – (RealEstateRama) — 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.

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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.

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Contact: Michael Huff

(202) 465-9943

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Ginnie Mae

At Ginnie Mae, we help make affordable housing a reality for millions of low- and moderate-income households across America by channeling global capital into the nation's housing markets. Specifically, the Ginnie Mae guaranty allows mortgage lenders to obtain a better price for their mortgage loans in the secondary mortgage market. The lenders can then use the proceeds to fund new mortgage loans available. Without that liquidity, lenders would be forced to keep all loans in their own portfolio, meaning they would not have adequate capital to make new loans.

Unlike the GSEs, Ginnie Mae is profitable. We do not buy or sell loans or issue mortgage-backed securities (MBS). Therefore, our balance sheet doesn't use derivatives to hedge or carry long term debt.

Contact:

Phone: (202) 708-0926

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