According to the senators, the new bill is designed to address the issue of “churning,” a process that results in repeated home loan refinancing that generates fees and profits for lenders at the direct expense of veterans and their families, often without their knowledge. The senators estimated that more than 40,000 refinanced VA home loans between April 2016 and August 2017 involved churning by unscrupulous lenders.
“The government shouldn’t be backing lenders who exploit veterans just to line their own pockets,” said Sen. Warren. “All three of my brothers served in the military and I understand the incredible sacrifices made by those who fight for our country–they deserve better.”
“The VA home loan program was designed to give veterans and servicemembers the opportunity to become homeowners as they raise their families and it has proven to be a great success,” said Sen. Tillis. “Unfortunately, a few bad actors are taking advantage of the program as home lenders have begun targeting veterans and servicemembers to generate profit and fees at their expense, often leading to higher loan amounts and putting families in a worse financial position than they started off. Our men and women in uniform deserve better, and I am proud to partner with Senator Warren on this bipartisan legislation that will end these predatory home lending practices. I hope Congress will consider this bill quickly so we can protect those who have sacrificed so much to protect us.”
The legislation has been co-sponsored by a bipartisan coalition of senators. Warren and Tillis added that the American Legion, Veterans of Foreign Wars of the U.S. and the Mortgage Bankers Association “are all supportive of efforts to address this issue.”