VA has issued a new policy implementing the May 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act, to protect Veteran homeowners from predatory lending practices when obtaining a VA-guaranteed refinance loan.
The act helps protect Veterans and service members from the dangers associated with repeatedly refinancing their home loans, requiring, among other things, the seasoning of the original loan and a recoupment period for fees, closing costs and expenses related to the refinance.
“We want to ensure Veterans have the informed ability to take advantage of economic opportunities and make sound decisions that enable them to prosper when using their benefits,” said Acting VA Secretary Peter O’Rourke. “This is yet another tool that will help Veterans meet their personal goals.”
The act also provides for a specified interest rate decrease and for protections of loan-to-value ratios. A refinancing loan must meet the requirements specified in the act or VA will not guarantee the loan.
VA recently implemented a policy where lenders provide Veteran borrowers a comparison of their existing VA-backed home loan to the proposed one when refinancing to ensure borrowers are set up for success. This is also referred to as a recoupment or break-even analysis, which helps Veteran borrowers clearly understand the costs of refinancing, the monthly payment savings, and the overall impact on their finances.
VA-backed home loans generally do not require a down payment, have low closing costs, and are the lowest rates among all loan products in the marketplace. Notably, VA-backed home loans also continue to outperform other products in the market. In fiscal year 2017, VA guaranteed more than 740,000 loans for a total of $189 billion, an all-time record for the VA Home Loan Program. Over the past three years, VA has guaranteed more than 2 million VA home loans for over $500 billion.
The VA Home Loan Program’s mission is to maximize Veterans’ and service members’ opportunity to obtain, retain, and adapt homes by providing a viable and fiscally responsible benefit program in recognition of their service to the nation. In addition, VA also helps severely disabled Veterans adapt their homes to live more independently by providing up to $81,080 for home modifications. For more information, including eligibility criteria, visit Housing Grants for Disabled Veterans.
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Me and my husband Refinanced our home in 2014 and changed it from a VA loan to a Conventional loan not knowing once changed to a Conventional loan in Texas you can’t go back to a VA loan. So this only that I know of apply’s in Texas only. We need a bill to pass that once you Refinance from a VA loan you should still have the privilege to go back to a VA loan in the future. Do anyone know how to get around this?
I am a Viet Nam Era Veteran and have never used my VA home loan. We have lived in our house for 18 years. Refinanced about 5 times to lower rates and once a second or money out. By taking money out on the property 14 years ago or so made me ineligible for a VA loan on this property in Texas. Bad enough not eligible for any medical benefits because we exceed the household income requirement. As one California female state official quoted: The War Veterans are damaged goods and not suitable for employment.
At any rate see if you can help us with getting this law against Texas Veterans waived please……..
How are the Veteran’s doing?
I used the GI Bill, as well as my father. Graduated twice from Augusta Technical College.
Did you order a survey? It would had showed the properties lines before closing
I bought a home in the end of 2016 under VA program though Pentagon Federal Credit Union.
Now I’m told the house sits 15′ over the lot line and has for 20 yrs. The home next to me sold last Dec and the owner has put up a fence cutting off my drive, garage, etc and my master bedroom is in their yard. Lender, title insurance etc will not give me any help to remedy the situation but I’m told I can not refinance or sell the home.
What good is the VA mortgage under this situation? They did the appasal which is now “0” and Pentagon Federal picked the closing attorney, title insurance company, expects me to pay the loan but no one wants to help solve the problem.
Why should I pay them for nothing I can own?
Richard Harris