Buyer Proposes Legislation to Help Vets in Home Mortage Trouble

From the Montgomery Advertiser, of all places:

With thousands of service members and veterans losing homes or facing foreclosure as the mortgage crisis continues, lawmakers are pushing legislation to raise VA loan ceilings, lower VA funding fees and expand the VA's ability to help veterans to refinance loans they can't afford.

In 2004, when the VA loan maximum was $240,000, Congress indexed that amount to rise automatically with the single family home loan limits used by Freddie Mac and Fannie Mae to fuel the broader mortgage market. Congress, however, failed to index VA loan guarantees for refinancing of non-VA-backed loans. This has left many veterans unable to use VA refinancing to retire subprime non-VA-backed mortgages larger than $144,000.

Rep. Steve Buyer, R-Ind., ranking Republican on the veterans affairs committee, has a bill (HR 4539) that would, among other things, raise that ceiling for VA-backed loans for refinancing to at least $417,000. Until that becomes law, a lot of veterans with subprime loans will not be able to use VA refinancing. A $144,000 loan ceiling, a 10 percent equity requirement and falling home values, [VA Loan Service director] Caden said, means "we really can't help very many veterans in that position."

In short, if a vet is having trouble refinancing a subprime loan, Buyer's legislation will allow the VA to help them do it, thus allowing them to keep their house.