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Protecting Veterans from High-Pressure Mortgage Refinances

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By Debbie Gregory.

After volunteering to protect their country, servicemembers and veterans are often targeted by disreputable forces at home: predatory lenders.

Government-owned Ginnie Mae, whose purpose is to make mortgages more affordable, is conducting an investigation into unscrupulous mortgage lenders who allegedly pressured servicemembers and veterans into unneeded mortgage refinances.

Ginnie Mae backs loans made through the Department of Veterans Affairs.

Under investigation are lenders who push consumers to refinance loans over and over again in a short period of time, a practice known as churning.

Senator Elizabeth Warren, an outspoken critic of the finance industry sent a letter to Ginnie Mae’s Acting President, Michael Bright, asking whether some lenders were abusing Ginnie Mae’s program by engaging in aggressive marketing tactics.

Bright replied that Ginnie Mae and the Department of Veterans Affairs have created a task force to address abusive practices by lenders approved to issue Ginnie Mae-backed bonds.

VA loans do not require a down payment and closing costs are added to loan balances, so borrowers don’t have to pay them at the time of the sale. But this also makes these loans prime targets for churning.

Some lenders are persuading servicemembers to refinance loans at rates that barely reduce their mortgage payment.

Ginnie Mae has been trying to slow down the refinancing rush by putting a six-month moratorium between new mortgages and a refinance.

However, once the six-month mark passed, Bright said Ginnie Mae saw a blitz of lenders once again preying on servicemembers. Bright said that some lenders apparently targeted veterans for a refinance at “six months and one day.”

Military Connection salutes and proudly serves veterans and service members in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve,  and their families.

Military Connection: More Veterans Owning Homes: By Debbie Gregory

Veteran homeownersOver the last few years, the Department of Veterans Affairs (VA) Home Loan Program has gained significant market share, compared to competing private and government mortgage options. One of the main reasons for this is that big banks and mortgage companies have increased efforts to help returning Veterans become homeowners.

The VA Home Loan Program is now at record highs, having more than doubled since 2007. Back in 2011, VA guaranteed home loans made up only 3% of mortgages in the country. In Fiscal Year 2014, VA guaranteed home loans jumped to around 7%.

There are many reasons why VA loans are rapidly increasing. First and foremost, there is a large demand for homes among the Veteran community. With the number of Iraq and Afghanistan Veterans separating from the service, there is an influx of families, relocating and looking for homes. In total, the VA estimates that there are more than 22 million Veterans from all generations, across the country. The majority of these Veterans will qualify for VA loans. And with today’s economy, the only way that some Veterans will get approved for a home loan is through the VA.

Here’s how the process works, in a nutshell: A Veterans applies for a certificate of eligibility from the VA. The VA reviews the Veteran’s credit, earning potential, etc. and then approves or disapproves the Veteran. Veterans with a certificate of eligibility are then free to seek out private lenders vetted with the VA.  The lenders provide the loans to the Veteran, with the VA’s guarantee that if the Veteran is unable to pay the loan, the lender will still be paid back.

Lenders recognize VA loans as good business. And VA guaranteed loans come with zero down payment and generous finance rates that make home ownership more affordable for the men, women and families who have made sacrifices in service to their country.

There are also scores of non-profits that partner with large corporations and lenders to help Veterans become homeowners. Organizations such as Habitat for Humanity, Homes for Heroes, the Military Warriors Support Foundation, HomeStrong USA, Operation Homefront, and Purple Heart Homes have gifted hundreds of homes to Veterans.  Many of these houses were acquired through donations from major lenders, including Bank of America, JPMorgan Chase, SunTrust Mortgage, Wells Fargo, and U.S. Bank.

Considering the struggles many Veterans face in light of the current economy,  it’s satisfying to see so many Veterans and military families are able to fulfill their dream of owning their own home. It’s the very least a grateful nation can provide for as a way to say thank you for the sacrifices they have made.

Military Connection proudly serves those who serve in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve, Veterans and their Families. We are the go to site for Veteran Employment and information on Veteran education. Militaryconnection.com provides Veterans with and Directory of Employers, a Job Board, information on the Post-9/11 GI Bill, and a blog that offers Veterans boundless information. Be sure to visit Militaryconnection.com, the go to site.

Military Connection: More Veterans Owning Homes: By Debbie Gregory

Military Connection: VA Loans Boost Housing Market: By Debbie Gregory

Va loansThe nation’s struggling housing market could be seeing improvement, thanks to military Veterans. Approximately 2.8 million Iraq and Afghanistan Veterans may be able to take advantage of VA mortgages and special discounts in order to achieve home ownership. VA home loans are already nearing a twenty year high.

There are currently over 2 million VA loans, with total balances reaching over $370 billion. Despite popular belief, the VA doesn’t loan money to Veterans. VA loans are actually loans from private lenders that are secured through the VA. The federal government reduces the risk for lenders by covering up to 25 percent of the loan amount if the loan is defaulted on. These loans have already accounted for 8.1% of mortgages made in the first quarter of 2014. This number is up from 6.9% in 2013.

In 1944, President Franklin Roosevelt signed the Servicemen’s Readjustment Act, also known as the G.I. Bill of Rights, into law.  The law included benefits for military Veterans such as college tuition assistance, Veteran mortgages, business loans and unemployment benefits. VA mortgage benefits are available to active duty service members, reservists, Veterans, as well as their surviving spouses.

More and more active-duty service members and younger Veterans are using their VA mortgage benefits to buy homes. This may be because the cost to rent is getting more expensive, and the risks of homeownership now seem less dangerous.

Service members and Veterans are also using additional resources in their real estate ventures. Homes for Heroes provides additional savings to service members and Veterans by offering rebates, discounts and other exclusive deals. By using a Homes for Heroes affiliate for your real estate business, you enjoy significant savings while contributing resources for the operation and management of the Homes for Heroes Foundation. The foundation is a 501 (c) 3 that provides ***or*** coordinates financial assistance and housing resources to our Nation’s Heroes such as Military personnel, police/peace officers, firefighters and first responders in need.

Military Connection proudly serves those who serve in the Army, Navy, Air Force, Marines, Coast Guard, Guard &amp,amp,amp, Reserve, Veterans and their Families. We are the go to site for Veteran Employment and information on Veteran education. Militaryconnection.com provides Veterans with and Directory of Employers, a Job Board, information on the Post-9/11 GI Bill, and a blog that offers Veterans boundless information. Be sure to visit Militaryconnection.com, the go to site.

Military Connection: VA Loans Boost Housing Market: By Debbie Gregory