The Department of Veterans Affairs will require lenders to provide early disclosures to veterans seeking to refinance into a VA Interest Rate Reduction Refinance Loan. The new policy aims to ensure that the VA streamline refi loan they sought would actually lower their monthly mortgage payments and is not just a scam for lenders to charge higher fees. Loan churning, or serial refinancing, is at the root of the VA policy change. Churning refers to multiple refinancing of an unseasoned mortgage loan within a very short time, often within six months of origination. Serial refinancing may add more payments and interest to the new loan, prolonging debt repayment, and can strip equity. It also potentially raises the risk of default by the borrower. In addition, the risk of prepayment could affect pricing of Ginnie Mae securities, which could cause lenders to charge higher rates on VA loans to make up for the ...
A bill introduced in the Senate last week with some bipartisan support would allow real estate investment trusts to regain access to funding from Federal Home Loan Banks. The bill would overturn a 2016 rule from the Federal Housing Finance Agency that restricted captive insurance companies from being FHLBank members. Before the FHFA rule took effect, a number of REITs established captive insurers to gain access to FHLBank advances, which come with better terms than ...
The Federal Home Loan Banks may be required to jointly establish at least one entity to aggregate conventional mortgages and use a new government program to issue guaranteed MBS under draft legislation from Sen. Bob Corker, R-TN.
Analyst Barry Habib of MBS Highway told us last week that once the yield breaks above 3.00 percent it’s only a matter of time before it hits 3.80. Just think of what that might do to the mortgage business…
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