Statement of 2024 MBA Chairman Mark Jones on VA Home Lending Before the Committee on Veterans’ Affairs Subcommittee on Economic Opportunity
Details of the hearing can be found here. Click here for Jones' written statement.
[Please Note: Please find Mark Jones' prepared oral statement below. Jones may add to or subtract from these remarks during the course of his testimony. Portions of the text may be omitted during the testimony.]
Chairman Van Orden, Ranking Member Levin, and members of the Subcommittee, thank you for this opportunity to testify today on behalf of the Mortgage Bankers Association.
My name is Mark Jones, and I am President of Union Home Mortgage, a national independent residential mortgage lender. Union currently services $23 billion dollars in residential mortgage loans, which includes VA loans. Previously, I co-founded and ran AmeriFirst Home Mortgage, a privately held mortgage lender headquartered in Kalamazoo, Michigan.
I am here today in my capacity as Chairman of the Mortgage Bankers Association. As a lender with deep personal experience originating, securitizing, and servicing VA Home Loan Program mortgages, I am honored to be appearing before this Subcommittee.
MBA appreciates this Subcommittee’s focus on the current state of VA’s Home Loan Guaranty program – including a review of the agency’s procedures governing mortgages, appraisals, refinancing, foreclosures – and the Veterans’ Assistance Servicing Purchase or “VASP” program – which is scheduled for release this year.
MBA is pleased to offer recommendations designed to help improve various Home Loan Program elements and ensure that our nation’s Veterans receive a high-quality homebuying experience in a challenging, changing, and competitive mortgage market environment.
At the outset of my statement, I want to underscore that MBA – and its many individual member firms who originate and service VA loans – have a positive and productive working relationship with the agency – one forged over many years of partnership.
The VA Home Loan Program is one of the most significant benefits our nation’s heroes earn through their sacrifice and service. MBA recognizes the need to make this important program more accessible and as competitive as other mortgage loan options. Such an effort will involve reaching a bipartisan consensus in Congress, dialogue with the VA, and key market participants and advocates. MBA looks forward to playing a constructive role.
We were pleased to see the enactment of the Improving Access to the VA Home Loan Benefit Act during the 117th Congress. This has resulted in positive reform, including the expanded use of desktop appraisals as well as proposed improvements to VA’s minimum property requirements, which have long been known to hold up transactions.
However, housing markets across the country are as supply-constrained as ever and continue to favor sellers, there is more that must be done to strengthen a home purchase offer backed by VA.
I want to emphasize three key ways MBA believes the VA home Loan Program can be improved:
The first is to have the VA roll out a permanent partial claim option. A partial claim enables veterans to resume making their regular payments while deferring their missed payments to the back end of the loan. It is a crucial loss mitigation tool that exists within every other government loan program but is missing from the VA arsenal.
Mortgage servicers need this option to deliver timely payment relief to distressed Veteran homeowners and preserve affordable homeownership.
Action by Congress is needed to make this essential option a reality. Language authorizing a partial claim is contained within S. 3728, recently introduced by Senators Tester and Brown.
To be clear, the best and most durable loss mitigation framework for VA loans would include both a partial claim option and the implementation of VASP.
Another recommendation is to tie the level of the VA Home Loan funding fee to the actual credit risk within the program. To do so would make the cost of the program cheaper – and allow more Veterans to be able to purchase a home – in the midst of a national housing affordability crisis.
A third opportunity is to delegate management of VA appraiser panels to lenders – the same way that the process works with every other loan program. VA’s insistence on tightly managing its own appraisal rosters significantly slows things down, making purchase offers backed by VA less competitive.
An additional recommendation is for the VA to adopt a Drafting Table process to collect real-time input on new initiatives from stakeholders – similar to the one used by FHA.
In closing, MBA appreciates this opportunity to comment on many of the critical issues that impact the VA Home Loan Program – including the need for potential legislation to implement needed statutory changes.
We also look forward to working with Congress to help provide the VA with the resources necessary to implement these changes.
I look forward to answering any questions you may have.