 |
| Yuki orphan |
Back in May 31 2018 Ginnie Mae and Congress came up with an plan that Veterans would not be allowed to refinance before two hundred and ten days lapsed after the close of their purchase or refinance transaction .
To explain, early pay offs before six months costs the originating lender a boat load of cash. The costs a fees a borrower pays for a home loan are not
all recouped in closing costs. Lenders sell off mortgages, in this case VA loans to Ginnie Mae and receive a premium for each deal.
The Economic Growth, Regulatory Relief and Consumer Protection Act of June 1 2018 set in motion a hard and fast law that made it so that all VA loans in process or at funding were held hostage and not considered saleable. The Department of Veterans Affairs and Congress failed to plan for the millions of mortgages in process. Lenders were forced
to hang on to loans and use warehouse lines or cash to fund these what became known as "orphaned loans."
Ginnie Mae changed pooling eligibility criteria for Department of Veterans Affairs (VA) refinance loans in securities guaranteed on or after June 1, 2018.
Today to be eligible to sell a loan to Ginnie Mae, the note date of the refinance loans must be on or after 210 days after the first monthly mortgage payment was made, or the date on which six full monthly payments have been made on the mortgage, whichever is later.
June 6th of 2018 after the legislation was signed into law, Ginnie Mae issued an All Participant Memorandum (APM) implementing the changes effective immediately which failed to plan for mid stream in progress loans, thus sticking all these mortgages into limbo.
Congress has now circled back, a year plus later, to allow lenders to sell the orphaned loans to Ginnie Mae.
here is Congress's complete Bill
https://www.congress.gov/bill/116th-congress/senate-bill/1749/text
