Clinton Announces Comprehensive Legislation to Protect Servicemembers Serving in Combat from Foreclosure and Expand Veterans Housing and Mortgage Refinancing Opportunities

May 2, 2008

Proposal Would Prevent Any Armed Forces Member in Combat From Being Foreclosed On and Expands the VA Home Loan Program to Allow More Vets Throughout the Country to Get a Mortgage and Refinance Their Troubled Mortgages

WASHINGTON, DC—Senator Hillary Rodham Clinton today unveiled comprehensive legislation aimed to bolster the VA Home Loan Guaranty Program, which has helped millions of veterans purchase or construct a home since it was enacted under the 1944 GI Bill. The Armed Forces Housing Security Act would make it more effective in high cost areas and more accessible by waiving the fees associated with the program. Also the bill enables all qualified vets to refinance an existing mortgage through the VA. Moreover, her legislation prohibits any bank, lender or mortgage servicer from foreclosing on a member of the Armed Forces who is on active combat duty overseas and provides a one year foreclosure “timeout” so veterans returning from their deployment will have time to get their finances in order and seek counseling or other assistance to ensure they can keep their home.

“It is unconscionable that any serviceman or servicewoman who risks their life everyday to serve their country in combat would have to worry about their family losing their house back home. My bill will put an ironclad halt to any foreclosure against an active duty combat servicemember so that our men and women in uniform won’t have to worry about their mortgage payments. This bill will also give them time to work out their finances through a mortgage modification, a write down or other workout plan so as they adjust to civilian life, they can ensure that they keep their home,” said Senator Clinton. “As the foreclosure crisis threatens to deepen we also need to ensure that the VA Home Loan Guaranty program works for all our vets either through new safe and affordable mortgages or through refinancing their unworkable mortgage.”

Overview of Senator Clinton’s Legislation

Keeping Soldiers and their Families in their Homes

Prohibits any foreclosure, repossession or civil suit proceedings regarding mortgages against any servicemember who is serving overseas in combat in Iraq and Afghanistan and up to a year after they return home from their deployment.

Extends the moratorium on foreclosures for all servicemembers from 90 days to one year.

Prohibits a foreclosure that was prevented during the moratorium from negatively affecting a combat servicemember’s credit rating or financial record.

Encourages lenders to seek mortgage modifications, write downs or other workout plans to make the mortgage affordable.

Improving the VA Home Loan Program

Increases the ceiling on mortgages allowed by the VA so that vets in high cost of living areas can purchase a home through the program.

Waives any of the fees that vets are required to pay in order to participate in the VA home loan program.

Allows all veterans, regardless of whether they currently have a VA loan, to refinance their unworkable mortgages through the VA refinancing initiative.

Mortgage and Financial Services Counseling for Combat Vets

Requires the Secretaries of Defense, Veterans Affairs and Housing and Urban Development to set up a program to reach out to and provide free mortgage and foreclosure prevention counseling to veterans returning from active duty.

Click here to read the text of Senator Clinton’s bill.

###