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Feds put 9 lenders on notice about ‘aggressive, misleading’ VA loan practices | Military Times

Feds put 9 lenders on notice about ‘aggressive, misleading’ VA loan practices | Military Times

Government officials have put nine lenders on notice that they’ll be kicked out of the primary finance program for VA loans if they don’t stop “loan churning” practices that are allegedly hurting veterans and putting the benefit at risk.

“We really need to defend the VA program,” said Michael Bright, executive vice president and chief operating officer of Ginnie Mae, a government corporation that oversees the process for ensuring the success of the government’s mortgage-backed securities guarantee. Ginnie Mae officials issued the notifications, building on work of a “loan churn task force” that started in September.

“We need to make sure that capital is there to support the program. If lenders are abusing it with aggressive, misleading marketing and aggressive and misleading refinances, it not only harms veteran borrowers and homeowners, but it harms the capital that is the source for making these loans in the first place.”