MBA Praises Passage of Veterans’ Protection Bill
The House yesterday passed a bill that closes a loophole for thousands of loans made to veterans that fell through a crack in securitization.
By voice vote, the House passed H.R. 6737, the Protect Affordable Mortgages for Veterans Act of 2018 (https://www.congress.gov/bill/115th-congress/house-bill/6737). The bill amends the Economic Growth, Regulatory Relief and Consumer Protection Act and provides a technical fix so that recently executed loans refinanced by the Department of Veterans Affairs Home Loans can remain eligible for Ginnie Mae pooling.
Mortgage Bankers Association President and CEO Robert Broeksmit, CMB, issued a statement praising the House action.
“MBA would like to commend the House for passing last evening–by voice vote–H.R. 6737, which addresses an unintended consequence from the enactment of Title III of S.2155, ‘Protecting Veterans from Predatory Lending,’ by allowing VA-guaranteed refinance loans to remain eligible for pooling in Ginnie Mae securities,” Broeksmit said. “More broadly, it will help to ensure the confidence in the VA home loan program that is necessary for it to remain a viable choice for the nation’s service members and veterans.”
The bipartisan bill, sponsored by Reps. Lee Zeldin, R-N.Y., Claudia Tenney, R-N.Y., David Scott, D-Ga., and Kyrsten Sinema, D-Ariz., closes a loophole that placed nearly 2,500 VA loans, worth nearly $500 million, that inadvertently became ineligible for Ginnie Mae pooling, which resulted in increased closing costs and rates for qualified veteran borrowers.
“The ability to pool these mortgages, which are comparatively low risk and boast a very low default or delinquency rate, maintains important liquidity in the VA home loan market while helping to lower rates and increase cost savings for veteran borrowers,” Zeldin’s office said. “Furthermore, the inability to pool VA loans could cut off liquidity to the VA home loan market and stifle future refinancing opportunities.”
“Our nation’s service members, veterans and their families have made a tremendous sacrifice in service to our great nation and the freedoms and liberties that make this country the greatest in the world,” Zeldin said. “They have earned nothing less than our unwavering support when transitioning back into civilian life, and such a critical part of living out the American dream they fought so hard to protect is the dream of homeownership. Ensuring certainty in the market and access to affordable mortgages for our nation’s veterans is the least we can do as they transition into civilian life.”
The bill now goes to the Senate. “MBA now calls on the Senate to quickly pass this bill,” Broeksmit said.
