November 17, 2021
Scam/Fraud

Some VA lenders are still exploiting troops and veterans, report alleges

Troops and veterans in some cases are being “grossly” overcharged for VA home loans, and federal regulators need to suspend or ban alleged bad actors and strengthen their oversight over lenders, according to a new report from the office of Rep. Katie Porter, D-Calif.

The report alleges that NewDay USA and The Federal Savings Bank “continue to aggressively market cash-out refinancings with fees and interest rates that could cost borrowers tens of thousands of dollars more over the life of the loan compared to other lenders.”

“This report finds that grossly overpriced cash-out refinancings continue to scam veterans,” Porter stated in an introduction to the report released Aug. 3.

The report noted that the actions of Congress and federal regulators in 2017 and 2018 decreased the incidence of predatory cash-out VA loan refinancing. But while the number of these loans decreased in those years, the problematic rates and…

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