Mistakes happen. We all make them, and sometimes the unforeseen ones have sweeping consequences. The road to fixing those unintentional errors can often be long and require deep cooperation from unlikely allies. Sometimes solutions don’t come to pass.
Today MBA celebrates the possible: bipartisan cooperation that fixes an inadvertent legislative mistake that “orphaned” thousands of VA loans and created troubling uncertainty in the market.
Late last week, President Donald Trump signed the Protecting Affordable Mortgages for Veterans Act of 2019. You won’t see that headline on the front page of any newspaper, but it is a milestone that represents over a year of hard work, breakthrough coordination among Republican and Democratic members and staff on Capitol Hill, and, most importantly, constant interaction with MBA’s members.
This new law eliminates the confusion and duplicative requirements created by regulatory reform efforts in 2018 that had rendered some loans with valid VA guarantees ineligible for Ginnie Mae pooling. As a result, thousands of VA loans had been stuck on lenders’ books, stifling their ability to offer new mortgages to veterans and active-duty families.
We at MBA would like to thank the sponsors of this legislation, Representatives David Scott (D-GA), Lee Zeldin (R-NY), Mike Levin (D-CA), and Andy Barr (R-KY), as well as Senators Kyrsten Sinema (D-AZ) and Thom Tillis (R-NC), in addition to the authorizing committees and congressional leaders, for spearheading this endeavor.
Prompted by our members, MBA brought the issue to the attention of legislators late last year, highlighting to them the impact this unintended mistake was having on liquidity in the VA loan space and thus on mortgage availability for our nation’s service members and veterans. We couldn’t sit idle as lenders looking to make new loans and serve new consumers faced an unnecessary obstacle in their ability to do so.
At MBA, we live for the details. We always strive to dot our i’s and cross our t’s. It’s why we strive to correct all errors – both big and small – that impact our members, and helps explain why we fought so hard to make sure Congress repaired the very real damage caused by this mistake.