Washington Report

Advocacy Updates from Washington D.C.

VA Addresses Loan Churning

Following the President's signing into law The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (the Act), the Department of Veteran's Affairs (VA) released Circular 26-18-13 Policy Guidance Update: VA Refinance Loans and the Economic Growth, Regulatory Relief and Consumer Protection Act on May 25, 2018.

The Circular addresses the requirements brought on by the Act to address recent increases in predatory loan refinancing practices, called "loan-churning," marketed to Veterans with a VA-guaranteed loan. For loan applications taken on or after May 25, 2018, the VA will require lenders that offer a VA refinance loan to provide statements to the VA on recoupment of fees and incurred costs, give the borrower a Net Tangible Benefit test, and all VA loans must have a seasoning period. The Circular is effective immediately.

Circular 26-18-13

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