September 06, 2017

Senator Warren Raises Concerns About Aggressive and Misleading Marketing of VA Refinance Mortgages, Urges Ginnie Mae to Work with Her and Other Agencies to Crack Down on Abuses

Text of the letter (PDF)

Washington, DC - U.S. Senator Elizabeth Warren today raised concerns that certain companies may be aggressively and misleadingly marketing the refinancing of mortgages backed by the U.S. Department of Veterans Affairs (VA), generating fees for themselves at the expense of veterans and American taxpayers.

In a letter to Ginnie Mae, the government corporation responsible for approving lenders to securitize VA-backed mortgages and obtain a government guarantee, Senator Warren cited data suggesting that Ginnie Mae-approved companies were potentially mistreating veterans.  Senator Warren referenced a November 2016 report from the Consumer Financial Protection Bureau (CFPB) that it had received "many complaints from veterans who believe that they are being targeted with aggressive solicitations by lenders to refinance using one of the VA programs," and that "the solicitations they receive are potentially misleading." She also noted market analysis showing that certain VA mortgage servicers are significantly more likely to "churn" loans - a possible indication that those companies engage in aggressive marketing tactics.

The senator asked Ginnie Mae Acting President Michael Bright whether he believed any Ginnie Mae-approved companies are improperly taking advantage of VA refinancing programs, and if so, what the impact has been on taxpayers and what steps Ginnie Mae intends to take to address the issue.

"I hope that you will commit to working with me - and with other relevant federal agencies - to help ensure that veterans are protected from financial exploitation and that taxpayers are not bearing additional risks or costs because of lenders misusing VA refinance programs," wrote Senator Warren.

Vincent J. Perrone, President and CEO of Veterans Inc. and a retired Lieutenant Colonel in the U.S. Air Force, praised Senator Warren's efforts to address this issue. "As the leader of New England's largest non-profit provider of veterans' services, it is difficult to convey the outrage and frustration we feel over those who would prey upon our veterans. Our agency, which provides supportive housing to veterans in need and assists veteran families with accessing long-term housing, often has to step in and fill the void when a veteran has lost their home," said Perrone. "I applaud Senator Warren for taking this fight directly to Ginnie Mae, to try to secure intervention on behalf of our veterans. These brave men and women have earned, through service and sacrifice, lives of dignity and respect. We cannot allow predatory mortgage practices to undermine the security of their homes."