NewDay USA: Rigged Worksheets and 3,000 Churned Refinances

A repeat-offender VA lender showed veterans side-by-side worksheets engineered to hide that its cash-out refinances cost MORE than their existing loans — on at least 3,000 loans. CFPB: $2.25M penalty.

The CFPB found NewDay’s comparison disclosures listed the "new loan" payment as principal and interest only, while the "previous loan" figure included principal, interest, taxes and insurance — making its cash-out refinances look cheaper than borrowers’ existing mortgages when for many they were more expensive.

The practice covered at least 3,000 cash-out refinances in North Carolina and Maine through 2020 and Minnesota through 2018. The Bureau frames the case inside the long VA/Ginnie Mae fight over "churning" — lenders pushing veterans to refinance again and again while harvesting fees and secondary-market gains. Ginnie Mae had previously restricted NewDay and other lenders over churning concerns.

NewDay is a repeat offender: the CFPB sanctioned it in 2015 for illegal kickbacks and deceiving borrowers about a veterans organization’s endorsement. This page reports a regulatory settlement of the Bureau’s findings, not a criminal conviction.

"NewDay USA baited veterans and military families into cash-out refinance mortgages by hiding the true costs"
— Consumer Financial Protection Bureau

Source: Consumer Financial Protection Bureau. Case file in the VA Fraud case files — part of the VA Fraud record. Cases are published as the courts decided them; amounts are stated as the Justice Department states them (billed, stolen, or ordered in restitution, as labeled).