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Delaware VA Loan Update – VA Cracking Down on Predatory Lending

John Thomas June 10, 2018 Tags:
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Delaware VA Loan Update: Department of Veteran Affairs Cracking Down on Predatory Lending


Delaware Veterans & Lenders to Benefit from New VA Addendum that goes into Effect June 1, 2018.  Critical changes to the eligibility requirements for a Delaware VA loan and mortgages are on the horizon. If you have questions about the new guidelines or would like to apply for VA Loan call 302-703-0727 or APPLY ONLINE.  Ginnie Mae’s new implementation states that all VA refinance loans insured or guaranteed by the VA will only be eligible for government protection if it meets both of the following guidelines:

  1. The refinance takes place 210 days (about 7 months) after the date on which the first monthly mortgage payment was made.
  2. Six full monthly mortgage payments have been made before seeking a refinance.

These changes will go into effect on June 1, 2018 for all new Delaware Veteran Loans.

This addendum follows the increase in refinance loan officers who were abusing the system and aggressively targeting veterans who just purchased a new home promising lower rates on their monthly mortgages.  While on the surface, a lower mortgage interest rate seems beneficial, there are always hidden agendas and fees associated with these quick and risky VA IRRRL refinance loans.

While the government is protecting veterans with this change, local lenders will also find this Ginnie Mae enhancement beneficial. Previously, when VA loans were refinanced within six months of the original home purchase, the original VA lender ended up paying thousands in early payoff fees and the bond investors lost money which caused there to be less liquidity in the mortgage bond market  When there is less liquidity in the mortgage bond market then the consumer pays more money and higher interest rates.  With the new VA loan guidelines in effect, VA mortgage lenders will stop getting swindled out of large, unnecessary losses in revenue because of unscrupulous refinances lenders targeting veterans.

Delaware VA Loan

What does this mean for local Delaware veterans?

Delaware residents who are service members or military veterans will be able to purchase a home without receiving misleading and harassing offers to refinance their mortgage for a lower rate. Refinance shops will no longer be able to legally target veterans who are insured under a Delaware VA loan.

Residents secured by a Delaware Veteran Loan will still become eligible for refinance after making their sixth monthly mortgage payment and should remain cautious of risky refinance deals being thrown their way that cost a bunch of money that is rolled into the new loan to lower the monthly payment but 20-50 dollars. This recent VA addendum should be a great wake-up call that streamlining lower interest rates does not always benefit the homeowner.

Local lenders, like Primary Residential Mortgage, Inc., look out for their Veteran clients from the very beginning and work diligently to help them find the best VA  mortgage. Our branch has helped hundreds of military members/veterans in the Delaware secure a Delaware VA Loan.

Helping VA members find financial security via homeownership is an ongoing goal of ours and we plan to continue to protect these valued members of our community.  To speak to a VA loan officer or to get answers to your questions call us at 302-703-0727 or you can APPLY ONLINE for a VA mortgage loan.


Primary Residential Mortgage, Inc.

248 E Chestnut Hill Rd

Newark, DE 19713


About John Thomas

John Thomas and his team are long-time Delaware natives. They know the local real estate market as well as they know the loan products that help them serve it. Dedicated to helping first-time buyers; the John Thomas Team are experts on first-time buyer loan programs (FHA, VA, USDA) and conduct monthly first-time buyer seminars that have been attended by more than 3000 Delaware buyers.

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