Trenton – Legislation designed to protect veterans against predatory lending practices when seeking a mortgage took a significant step towards becoming law when it was released from the Senate Military and Veterans’ Affairs Committee on Monday.
Under the bill, sponsored by Senator Andrew Zwicker, the Department of Military and Veterans’ Affairs (DMAVA) would be required to refer eligible veterans, upon request, to the New Jersey Housing and Mortgage Finance Agency for loan counseling and other services.
“While significant consumer protections exist, veteran borrowers remain vulnerable to predatory lending. For example, ‘loan churning,’ otherwise known as loan flipping, is a predatory practice where lenders repeatedly solicit refinances, which typically results in increased and unnecessary costs to the borrower. We have an obligation to help our veterans learn about this and other deceptive loan practices,” said Senator Zwicker (D-Middlesex/Mercer/Somerset/Hunterdon).
Since 1944, the VA has guaranteed privately-originated mortgages for veterans through the G.I. Bill. Over 25 million mortgages have been guaranteed — including over 745,000 nationwide and over 7,500 statewide in 2022. VA mortgages generally do not require down payments or monthly mortgage insurance and typically have favorable interest rates.
The bill, S-3699, was released from committee by a vote of 4-0.