House votes to protect VA loans, promote counseling for FHA borrowers
WASHINGTON — The House passed two bipartisan financial services bills Tuesday that would aim to preserve affordable mortgage options for military veterans and encourage first-time time homebuyers to participate in housing counseling programs.
The Protect Affordable Mortgages for Veterans Act of 2019 was introduced by Reps. David Scott, D-Ga., and Lee Zeldin, R-N.Y. It would clarify that certain refinanced loans backed by the Department of Veterans Affairs can be securitized by Ginnie Mae.
This legislation would address technical complications that arose from last year’s regulatory relief law, the Financial Services Committee said in a press release. Sens. Kyrsten Sinema, D-Ariz., and Thom Tillis, R-N.C., have sponsored a Senate version that passed in June.
“This bipartisan legislation will preserve critical VA refinancing protections for our veterans while at the same time allowing for these orphaned veteran loans to be securitized,” Scott said in a statement. “Making this change will free up liquidity, enabling lenders to make new loans and ensuring that veteran borrowers have access to the VA home loan benefits they have earned.”
The bill would “allow lenders greater compliance certainty and better ensure that loans are not erroneously pooled into Ginnie Mae securities going forward,” Bill Kilmer, the senior vice president of legislative and political affairs at the Mortgage Bankers Association, said in a statement.
The Housing Financial Literacy Act of 2019, which was introduced by Reps. Joyce Beatty, D-Ohio, and Steve Stivers, R-Ohio, would offer first-time Federal Housing Administration borrowers a 25-basis-point discount on insurance premiums if they were to complete a housing counseling program.
“Motivating first-time homebuyers to seek vital pre-purchase counseling and equipping them with the much-needed financial skills and tools to make informed financial decisions benefits their families, the surrounding neighborhood, and our entire economy,” Beatty said in a statement when the bill passed the Financial Services Committee in June.
Both bills passed the House by voice votes. The Protect Affordable Mortgages for Veterans Act of 2019 now moves to President Trump’s desk for final approval before it becomes law.