United States : A Veterans Day complaint review: VA home loan refinancing.
Every November, we take time to honor the service of the many men and women whove worn the uniform of our armed forces. As veterans, theyve earned our gratitude and respect. Their service has also earned them access to various veterans benefits, to include home loan guarantees from the Department of Veterans Affairs (VA). But navigating the crowded market of lenders competing for their benefit can sometimes put veterans at a disadvantage if they dont fully understand their options or rights as consumers.
So this Veterans Day were focusing on mortgage refinance issues in our third semi-annual Servicemember Complaint Snapshot. Since the Bureau began accepting mortgage complaints in 2012, weve received over 12,500 mortgage complaints from servicemembers, veterans, and their families. This snapshot reviews and analyzes about 1,800 of those complaints related to mortgage refinancing.
We note an increased interest in refinancing by consumers and lenders. This may be due to a number of factors, including the current low interest rates. However, as we often see with financial products and services, what could benefit a borrower may also have the potential for financial harm. For lenders, a VA refinance is considerably quicker and easier than other types of refinance loans because it may not require an appraisal or conventional underwriting. This may lead some lenders to aggressively pursue veterans with offers to refinance their VA mortgage but those offers may have hidden features or not be in the veterans best interest financially.
Overall, in their complaints to us, veterans report that the solicitations and advertisements they receive are often misleading. Many complain that lenders fail to deliver on the promises made during the application process. And the quick underwriting often results in the borrowers failure to clearly understand important loan details, like how the new escrow account will be set up.
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