fha mortgage loans, local mortgage broker, midwest family lending

(515) 252-7107

APPLY NOW!

Mortgage Industry News

« Return to Mortgage Industry News

Growing Concerns Over VA Loan Churning

Thursday, January 11, 2018

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 and securitizes than in loans secured by other agencies. Some of the prepayments were at speeds that could not be justified by economic factors.  Other alerts, especially a weakening of Ginnie MBS prices versus other MBS, pointed to the growth of anomalous refinancing behaviors.

Read Full Article

Testimonial

"Eric was attentive to all my questions and concerns and provided answers in a manner in which I could understand. He sent friendly reminders via email to keep me posted on where we currently stand within the loan process and in the same time kept me accountable for the items that were required for myself to help keep the loan process moving."
Amanda L