Additional Measures Would Better Protect Borrowers from Risks Associated with Interest Rate Reduction Refinance Loans
Report Information
Summary
The OIG recommended the under secretary for benefits assess the loan comparison statement controls implemented in December 2021 and 2022 to ensure they operate as planned and confirm borrowers receive these statements as required.
The OIG recommended the under secretary for benefits seek a legal opinion from the VA’s Office of General Counsel on the allowability of fees initially charged as itemized fees to be retroactively accepted as part of the 1 percent flat charge if unsupported, and then review the potential overcharges identified in the audit sample to determine if action is needed to make the borrowers whole.
The OIG recommended the under secretary for benefits revise policies and procedures to comply with federal regulations on the itemization of costs charged under the 1 percent flat charge to ensure closing costs are properly charged.
The OIG recommended the under secretary for benefits obtain a legal opinion from the VA’s Office of General Counsel on the allowability of mortgage brokerage fees charged under the 1 percent flat charge, and then review the potential overcharge identified in the audit sample to determine if action is needed to make the borrower whole.
The OIG recommended the under secretary for benefits provide lenders at least annual communication about the importance of providing justifications for any loans not reported within 60 days.
The OIG recommended the under secretary for benefits update policies and procedures to ensure the borrower is reimbursed for any overcharges identified during regional loan center quality reviews.