Sorting real refinance offers from aggressive mail aimed at VA homeowners
Churning and the law
Safeguard
After VA and the CFPB saw veterans pushed into repeated refinances that added cost without benefit, Congress set limits in 2018. VA refinances now must meet seasoning, fee recoupment and net tangible benefit standards before VA will guarantee them. An offer that ignores these limits cannot be a VA-guaranteed loan.
Last reviewed against the primary sources listed below.
What the law requires
- A waiting period after the prior loan.
- Costs recovered within a set time on rate-reduction refinances.
- A real benefit, such as a lower rate.
Mailer questions
What is loan churning?
Repeated refinancing that mainly generates fees for the lender rather than benefits for the borrower.