NEW YORK – May 7, 2019 – It can be financially harmful to borrowers and investors to repeatedly refinance their mortgages, warns Ginnie Mae, a government-backed firm that guarantees government mortgage bonds. As a result, Ginnie Mae is taking steps to crack down on the practice of “churning,” where lenders push borrowers to refinance their home loans over and over again.
Homeowners may be drawn to the idea of lower monthly mortgage payments, but multiple refinances can lead to more lender fees and a higher bill in the end. Churning is also making investors uneasy about Ginnie Mae’s outstanding bonds and causing doubt over whether they’ll get paid for their investments.
Ginnie Mae started to take action against individual lenders last year after their activity suggested that they were pushing refis on borrowers – even homeowners who wouldn’t benefit from a refi.
Source: © Copyright 2019 INFORMATION INC., Bethesda, MD