[Congressional Record Volume 165, Number 114 (Tuesday, July 9, 2019)]
[House]
[Pages H5274-H5276]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        PROTECTING AFFORDABLE MORTGAGES FOR VETERANS ACT OF 2019

  Ms. WATERS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1988) to clarify seasoning requirements for certain 
refinanced mortgage loans, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1988

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Protecting Affordable 
     Mortgages for Veterans Act of 2019''.

     SEC. 2. SEASONING REQUIREMENTS FOR CERTAIN REFINANCED 
                   MORTGAGE LOANS.

       (a) Ginnie Mae.--Paragraph (1) of section 306(g) of the 
     National Housing Act (12 U.S.C. 1721(g)(1)) is amended by 
     striking the second sentence (as added by section 309(b) of 
     Public Law 115-174).
       (b) Veterans Loans.--Section 3709 of title 38, United 
     States Code, is amended by striking subsection (c) and 
     inserting the following:
       ``(c) Loan Seasoning.--Except as provided in subsection (d) 
     and notwithstanding section 3703 of this title or any other 
     provision of law, a loan to a veteran for a purpose specified 
     in section 3710 of this title that is a refinance may not be 
     guaranteed or insured under this chapter until the date that 
     is the later of--
       ``(1) the date on which the borrower has made at least six 
     consecutive monthly payments on the loan being refinanced; 
     and
       ``(2) the date that is 210 days after the first payment due 
     date of the loan being refinanced.''.
       (c) Rule of Construction.--Nothing in this Act may be 
     construed to restrict or otherwise modify the authorities of 
     the Government National Mortgage Association.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
California (Ms. Waters) and the gentleman from Kentucky (Mr. Barr) each 
will control 20 minutes.
  The Chair recognizes the gentlewoman from California.


                             General Leave

  Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks on 
this legislation and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, last year, when Congress passed S. 2155, it included as 
section 309 a bill sponsored by Senators Tillis and Warren titled 
Protecting Veterans from Predatory Lending Act of 2018.
  That provision put new requirements in place to protect veteran 
borrowers from the aggressive and deceptive marketing practices of 
lenders pushing mortgage refinance deals.
  However, the drafting of this provision caused some unintended 
consequences; specifically, an estimated 2,500 loans that were in full 
compliance with all requirements at the time were later denied Ginnie 
securitization simply because they were in the process of being 
refinanced or securitized when the law became effective.
  Senators Warren and Tillis weighed in with Ginnie Mae, stating that 
it was not their intention to orphan those loans and have urged Ginnie 
Mae to address the issue.
  However, Ginnie believes legislation is needed to grandfather these 
orphaned loans and address other administrative issues that have 
resulted from the slight differences between the new requirements in S. 
2155 and Ginnie's prior requirements.
  That is why we are here today with the bill from the gentleman from 
Georgia, H.R. 1988, which is a reasonable step to address what were 
clearly unintended consequences of the previous legislation. I am 
pleased to support this bill.
  Mr. Speaker, I thank Mr. Scott and Mr. Zeldin for introducing this 
bill, urge Members to vote ``yes,'' and I reserve the balance of my 
time.
  Mr. BARR. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 1988, the Protecting 
Affordable Mortgages for Veterans Act, introduced by my friend, the 
gentleman from Georgia (Mr.   David Scott).
  This bill is an important continuation of work that our colleague Lee 
Zeldin from Long Island, who is a lieutenant colonel in the Army 
Reserve, started last Congress to better protect our Nation's veterans 
from financial fraud.
  This Congress, I was pleased to join Congressmen Scott and Zeldin as 
an original cosponsor of this legislation, along with my colleague on 
the House Veterans' Affairs Committee, Congressman Levin, to assist 
with advancing this bill through both this committee, the Financial 
Services Committee, and the House Veterans' Affairs Committee.
  Last year, Congress enacted S. 2155, the most pro-growth banking bill 
in a generation. Section 309 of that legislation included a provision 
to impose a new seasoning requirement for the securitization of loans 
insured by the VA.
  This provision addresses the questionable practice of churning; that 
is, the refinancing of a home loan over and over again just to generate 
fees and profits for lenders with a slight short-term benefit for the 
borrower but at an increased life-of-the-loan cost.
  Unfortunately, that provision created a technical issue for a group 
of VA loans that fell into no-man's land, if you will, between the date 
on which the mortgage was issued and the technical requirements of the 
new law, increasing the risk to lenders and making the loans less 
attractive to investors.
  Congressmen Zeldin and Scott took quick action to correct this 
unintended consequence, but Congress ran out of time last year and it 
did not become law.
  The bill we are considering today, H.R. 1988, is a continuation of 
their efforts to address this unintended problem and ensure that these 
VA loans receive the equitable treatment they deserve.
  To some, this bill today might seem to be just a technical fix, but 
it is an important one. Our Nation's veterans should not be subject to 
suspect practices like churning.
  I am pleased that this bill, along with the ongoing efforts of the VA 
loan securitizer Ginnie Mae, will stamp out churning and better protect 
veterans.
  Mr. Speaker, I urge my colleagues to support H.R. 1988 and, once 
again, commend my colleague from Georgia (Mr.

[[Page H5275]]

  David Scott), and I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Georgia (Mr.   David Scott), a senior member of the 
Committee on Financial Services and sponsor of H.R. 1988.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I thank Chairwoman Waters 
for her support and encouragement to us to continue this.
  Mr. Speaker, I want to make this opening statement because it is very 
important for us to realize the importance of this bill because, today, 
according to the latest data from the Veterans Administration, we are 
losing 20 of our military veterans every single day to suicide.
  This is a clarion call from our veterans for help, and what we are 
doing today is one small step. But, as I will explain as I go on, we 
are doing much, much more because we need to bring this suicide rate to 
a stop.
  So much of it is caused by disappointment, discouragement, and giving 
up. But, after today, with this vote, we will send a powerful message 
to this Nation and especially to our precious veterans that help is 
indeed on the way.
  Now, I first of all want to thank my bipartisan friends Mr.   Andy 
Barr, Mr. Zeldin, all of them, for this is truly a bipartisan effort, 
and I thank them for their support as we move forward with this.
  Now, Mr. Speaker, I want to take my time and I want to go through 
this, and I want folks to really understand why this is so important. 
Mr. Barr touched on it.
  Last year, when Congress passed S. 2155, which was called the 
Economic Growth, Regulatory Relief, and Consumer Protection Act, it 
included a set of bipartisan reforms to refinancing requirements for 
loans to protect our veterans from the predatory act of loan churning.
  Mr. Speaker, this shows you the deviousness of it, that here you have 
these predatory lenders who are out here targeting our veterans and 
charging them over and over for the same payment on these refinancings.
  How devious--how evil--can you be to do this to our veterans over and 
over again? And they do this to generate these fees and profits for 
these predatory lenders, while offering little to no benefit for our 
veteran homeowners--just using them.
  So, in order to prevent this, S. 2155 codified new refinancing 
requirements, requiring lenders to demonstrate a material benefit to 
consumers when financing their mortgages and allowing for the initial 
loan to mature for at least 210 days before a borrower can refinance.
  Now, these reforms were necessary to ensure that our veterans are 
adequately protected from these bad actors, these predatory lenders, so 
that our veterans can have access to the safe and affordable 
homeownership opportunities that they have earned and deserve.
  Upon implementation of S. 2155, however, as Mr. Barr mentioned, a 
technical error in the language of S. 2155 caused a deviation in how 
this 210-day seasoning period was calculated, between what was written 
in the text and the requirement in place at Ginnie Mae.
  For those who may not know, Ginnie Mae is the Government National 
Mortgage Association.
  Now, this, combined with the lack of clarity around time lines to 
implement these new requirements, has caused 2,500 refinanced veteran 
loans that met Federal requirements at the time of closing and were 
guaranteed by the VA to be barred from this Government National 
Mortgage Association, Ginnie Mae's securitization, which resulted in 
making these veteran loans orphan loans.
  They are there but no longer eligible for the secondary investment 
market opportunities that they deserve, despite meeting all Federal 
requirements, as well as backing from the VA, and it is clear that it 
was not the intent of Congress to orphan these veteran loans.
  But, rather, our intent when we passed the Senate bill was to ensure 
that there were strong and enduring protections in place to prevent 
future loan churning.
  Can you imagine somebody sending you a bill and you paying for the 
same thing over and over? How evil is that?
  This bill that we have today will put a stop to that predatory type 
lending and the abuse that it has caused our veterans.
  And this is also necessary, Mr. Speaker, because it preserves 
liquidity while maintaining strong refinancing requirements to keep 
these bad actors out and ensuring that our veterans, our men and women 
of the military who have served our country through their outstanding 
bravery, their courage, their great sacrifice for us, have access now 
to safe and affordable home ownership opportunities.

                              {time}  1645

  Mr. Speaker, without this needed legislative fix, VA lenders may need 
to sell or refinance these mortgages at a loss, causing damage to the 
VA home loan market and potentially hindering their ability to 
originate similar loans in the future or raising borrowing costs and 
rates for other qualified veterans who will be suffering the same 
abuse.
  Mr. Speaker, as I mentioned before, I am especially proud to have 
worked with my colleagues on this: Mr. Lee Zeldin on the Financial 
Services Committee; Ms. Waters, our chairwoman; and Mr.   Andy Barr, 
who sits on this committee. I also want to mention Mr.   Mike Levin, 
who sits on the Committee on Veterans' Affairs.
  We provided bipartisan common sense to fix this for our beloved 
veterans. Through this bipartisan work of my colleagues on these two 
committees, we have been able to move this bill through the House, 
ensuring that the dream of homeownership continues to be preserved for 
our Nation's precious veterans, to whom we owe the deepest debt of 
gratitude.
  Mr. Speaker, I mentioned in my remarks about this great tragedy, and 
I want to take this opportunity to let veterans who may be hearing this 
discussion this afternoon know that this Congress stands with and 
around them, and there are Members of Congress that have many bills and 
many different programs to get financial resources.
  Dr. Bucshon, my Republican colleague, and I, for example, have a 
process going where we are addressing the shortage of psychiatrists. We 
are working with the American Psychiatric Association and the American 
Medical Association to pay those doctors' student tuitions and give 
them scholarships so that they can come into the VA to work.
  For the project I am working on with my good friend, Senator Johnny 
Isakson over in the Senate, we are trying to get more resources to open 
up more health clinics for our VA. And there are other things going.
  I want people to know that down in my home State of Georgia, in my 
district, in the next month, on August 10, the doctors, nurses, and 
hospitals all over Atlanta, Georgia, are coming together, giving their 
time, along with the top administrators from the VA. They will be there 
in Jonesboro at Mundy's Mill High School.
  We can cut down this suicide rate. It is a shame. It is a disgrace 
for this country. We are doing something about it in this Congress. 
Members on both sides of the aisle understand that this isn't a 
Democratic problem or a Republican problem. It is America's problem, 
and our veterans deserve our help.
  Mr. BARR. Mr. Speaker, again, I thank my friend, the gentleman from 
Georgia, for his bipartisanship and his willingness to fight for 
veterans. I appreciate that.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from New York (Mr. Zeldin), my Republican colleague on the House 
Financial Services Committee, a veteran himself and a servicemember who 
has been a champion on legislating this fix.
  Mr. ZELDIN. Mr. Speaker, I thank Ranking Member Barr for his 
leadership, not just for yielding time. This is something that he has 
been working on himself, putting a lot of heart, passion, and thought 
into.
  I thank Congressman   David Scott for his incredible leadership on 
this important bipartisan effort. He laid it out so eloquently just 
now, the many aspects of not just this issue but the need to fight for 
veterans.
  There are many people who are here in the gallery, millions of people 
at home watching C-SPAN, shocked at

[[Page H5276]]

what they are seeing, as Republicans and Democrats in the House and the 
Senate work together to get a bill through committee, through the 
Chambers, and to the President's desk to become law. The beneficiaries 
will be our Nation's veterans.
  I rise today to urge passage of H.R. 1988, the Protecting Affordable 
Mortgages for Veterans Act. It provides more than a technical fix. It 
is important for recently issued loans refinanced by the Department of 
Veterans Affairs to remain eligible for the secondary market.
  This fix is essential to prevent a liquidity crisis in the veterans 
home loan market and ensure that the brave men and women who have 
served our Nation in uniform have access to affordable mortgages.
  Through passage of this bill, we can ensure that VA home loans are 
not adversely impacted by issues in the veterans mortgage market 
created by the unintended consequences of S. 2155.
  The Economic Growth, Regulatory Relief, and Consumer Protection Act, 
S. 2155, became law in May 2018 and contained some very important 
bipartisan reforms to protect veterans from predatory lending and 
deceptive marketing. These provisions are essential to protect the VA 
home loan market, but unclear timelines laid out in the legislation, 
and the way that Ginnie Mae chose to implement the requirements of the 
new law, have left an estimated 2,500 or more VA home loans boxed out 
of the secondary market.
  These mortgages are now considered orphan loans because they are no 
longer eligible for Ginnie Mae securitization, even though they met all 
Federal requirements and are backed by the VA.
  This bill would prevent a government-triggered liquidity crisis in 
the VA mortgage market by fixing this problem and restoring eligibility 
for these orphaned loans.
  Addressing this issue ensures that veteran homeowners or prospective 
home buyers who have earned access to the VA home loan program through 
their military service aren't hurt by a fluke in S. 2155.
  Without this bill, potential damage to the overall VA home loan 
market is likely because VA lenders may have to sell or finance these 
orphaned mortgages at a loss. This would have a negative impact on the 
brave men and women who have served our country and deserve a path to 
homeownership in order to achieve the American Dream.
  If lenders aren't able to securitize VA home loans through Ginnie 
Mae, closing costs and borrowing costs could go up, and opportunities 
to borrow or refinance could go down.

  Mr. Speaker, veterans have some of the lowest default and foreclosure 
rates in the Nation. They have earned access to VA home loans through 
their selfless service to our country.
  Even one VA home loan negatively impacted by a minor mistake is one 
too many when it comes to giving our veterans access to homeownership. 
That is why we must pass this bipartisan bill and send it to the 
President's desk to become law as soon as possible.
  Again, I thank my lead bipartisan cosponsors, Congressmen   David 
Scott and   Andy Barr, and   Mike Levin. I thank Chairwoman Waters for 
her efforts and Ranking Member McHenry. This was a truly bipartisan 
effort from the committee. Everyone came together and worked together 
to get to this important point, a huge bipartisan, bicameral win coming 
for our Nation's veterans.
  I urge adoption of this important bipartisan bill.
  The SPEAKER pro tempore. Members are reminded to avoid references to 
occupants of the gallery.
  Ms. WATERS. Mr. Speaker, I would inquire, through the Chair, if my 
colleague has any remaining speakers on his side.
  Mr. BARR. Mr. Speaker, I am prepared to close.
  Ms. WATERS. Mr. Speaker, I have no further speakers, and I am 
prepared to close.
  I reserve the balance of my time.
  Mr. BARR. Mr. Speaker, I yield myself such time as I may consume.
  Once again, I thank the sponsor of this legislation, the gentleman 
from Georgia (Mr.   David Scott).
  I thank the gentleman from New York (Mr. Zeldin) for his continued 
leadership on this legislation.
  I thank the gentleman from California (Mr. Levin), whom I have the 
privilege of serving with on the Veterans Affairs' Committee as well, 
for his leadership in getting this bipartisan legislation to the House 
floor and to this point.
  I thank the chairwoman of our full committee, the gentlewoman from 
California (Ms. Waters), for her leadership in helping navigate this 
legislation forward.
  Mr. Speaker, in conclusion, this is an important piece of 
legislation. It is bipartisan recognition of a problem created 
unintentionally by a law passed last year, and it is about providing 
two basic protections for veterans: protecting veterans who are seeking 
the dream of homeownership from predatory practices and from this 
practice of churning, and preserving liquidity in the secondary market 
for VA loans, which, in a nutshell, means that our veterans will have 
access to more affordable housing.
  Mr. Speaker, I thank my friends on the other side of the aisle, and I 
thank Mr. Zeldin for his leadership.
  I yield back the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield myself the balance of my time.
  H.R. 1988 will address some unintended administrative complications 
that resulted from implementing laws that were put in place to help 
protect veterans from unscrupulous lenders.
  I thank Mr. Scott and Mr. Zeldin for working in a bipartisan manner 
to bring H.R. 1988 before the House. I urge my colleagues to join me in 
supporting this bill.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Ms. Waters) that the House suspend the 
rules and pass the bill, H.R. 1988, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________