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VA Churning is Costing All Ginnie Mae Borrowers and Investors

Posted To: MND NewsWire

The Government National Mortgage Association (Ginnie Mae) is the agency, housed under the Department of Housing and Urban Development, that converts government guaranteed mortgages into mortgage-backed securities for investors to purchase. Their originations are 57 percent FHA loans, 40 percent VA loans, and 3 percent loans from other government programs, primarily the Department of Agriculture. For several years, as we have written about here , Ginnie Mae has been concerned about the significantly higher rate of repayments of the VA loans in its portfolio when compared to those originated by its other guarantors and to the government sponsored enterprises (GSEs) Freddie Mac and Fannie Mae. Some of the increased speeds result from the lower costs of refinancing a VA mortgage compared to other...(read more)