Citing reports of home loan refinancing schemes targeting veterans, U.S. Sen. Dean Heller (R-NV) called on Tuesday for an accounting of steps taken by the Department of Veterans Affairs (VA) to address the issue.
In a letter to VA Secretary David Shulkin, Heller, a member of the Senate Veterans Affairs Committee, voiced concern that the VA has not taken steps to curb predatory lending practices that involve VA Interest Rate Reduction Refinance Loan (IRRRL) products.
“There are stories of veterans, particularly those utilizing a VA home loan, being inundated with countless phone calls and mail trying to persuade veteran borrowers to refinance their home loans just so that lender can make a quick profit, sometimes resulting in the veteran refinancing multiple times a year,” the letter states. “This is a practice that unfortunately has been used so much it is called ‘churning’ and in many cases is detrimental in the long-term to the veteran’s home loan.”
Heller sought information about the prevalence of churning schemes targeting VA home loan participants, he requested changes to the IRRRL program to prevent churning practices, and he requested information about future actions the VA could take to address predatory lending.
Heller also requested a commitment from Shulkin to dedicate additional resources to the issue.
“My concern is that the VA is not taking the necessary steps to curb predatory refinancing through the VA’s IRRRL products,” the letter states. “The VA’s primary interest should be to protect veteran borrowers, and to date I have not heard what actions your agency is taking to stop the dangerous churning practices.”
Heller’s letter follows a report in the Chicago Tribune that cites officials at the Government National Mortgage Association, or Ginnie Mae, warning that some veterans are being flooded with misleading refinancing offers and are signing up without assessing the costs and benefits. The letter from Heller said Ginnie Mae is considering civil legal actions against some lenders.
The senator has worked to support the 300,000 veterans in Nevada through other initiatives as well, most recently through working to protect servicemembers’ personal information in light of the recent data breach to Equifax’s systems.