U.S. Rep. Andy Barr (R-KY) on March 28 signed on as one of the original cosponsors of the bipartisan Protecting Affordable Mortgages for Veterans Act of 2019.
“It is incumbent upon Congress to bring resolution to those veterans who, through absolutely no fault of their own, have been left in limbo and deserve the benefits and financial security they earned,” Rep. Barr said on April 4.
H.R. 1988, sponsored by U.S. Rep. David Scott (D-GA), would clarify seasoning requirements for certain refinanced mortgage loans, among other purposes, according to the congressional record.
“This legislation is a commonsense fix to ensure that the 2,500 veteran home loans impacted by a technical error will not be subjected to further uncertainty, which may hamper liquidity in the market,” said Rep. Barr, who serves on the U.S. House Veterans’ Affairs Committee and on the U.S. House Financial Services Committee.
The congressman is referring to the passage last year of the Economic Growth, Regulatory Relief, and Consumer Protection Act, S. 2155, which included several bipartisan reforms to protect U.S. veteran homeowners from rapid refinancing, a tactic that’s frequently known as loan churning, according to information provided by Rep. Barr’s office.
However, the timing dictated in S. 2155 did not align with the implementation of the law’s new rules, subsequently leaving some 2,500 VA-guaranteed loans ineligible for pooling under the Government National Mortgage Association, or Ginnie Mae, which was established in 1968 to promote home ownership.
Such so-called orphaned loans are barred from the secondary market, according to Rep. Barr’s office, putting a strain on liquidity for lending institutions.
“Though this legislation simply corrects a technical error, the impact it will have will be significant for the 2,500 veteran homeowners whose VA home loans were placed in limbo last May,” said Rep. Scott. “This bill is a small but important effort to show that Congress is keeping faith with our commitment to” the nation’s military veterans.
H.R. 1988 has been referred to both the House Financial Services Committee and the House Veterans’ Affairs Committee for consideration.