Rep. Porter Report Details Exploitation in VA Home Loan Program

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LiberalOC August 3, 2021

Congresswoman Katie Porter (CA-45) today released a report revealing how predatory mortgage lenders are still exploiting military borrowers, despite years of efforts to prevent such abuses. “AWOL: How Watchdogs Are Failing to Protect Servicemembers from Financial Scams” analyzes new government data and shows that NewDay USA and The Federal Saving Bank, two lenders that have been punished in the past for misconduct, charge veterans tens of thousands of dollars more for the same loan than their competitors.

“New Day consistently charges veterans exorbitantly high prices for VA guaranteed loans, including higher origination fees and interest rates, when compared to other VA lenders,” said Jason Richardon, Director of Research and Evaluation at the National Community Reinvestment Coalition. “Since large banks have chosen not to make VA loans, veterans have only a small number of lenders from which to choose. There is no conventional mortgage product that offers Veterans the same path to homeownership that the VA loan program does. It is regrettable that New Day has used this opportunity to leverage its outsized role in the market to push a higher-cost product rather than putting veterans on the path to homeownership with a lower-cost loan.”

A longtime commercial law professor and consumer protection advocate, Porter has made consumer protection a top priority in Congress. Her work to strengthen consumer protections for veterans and servicemembers includes language signed into law that protects servicemembers in privatized base housing from retaliation for making complaints. Porter has also secured language signed by the president that studies online exploitation of servicemembers and their families by predatory lenders, for-profit colleges, and health care providers.

Go Katie!