Veteran homeowners struggling under the weight of rising sub-prime mortgage payments could see a rise in the federally back refinance loan cap in legislation that passed out of a Congressional committee this week.
Rep. Jerry McNerney, D-Pleasanton, authored an amendment to the Helping Our Veterans Keep Their Homes Act of 2008 that would hike the existing $144,000 loan cap to $729,750.
The lower figure is virtually useless in Northern California, especially in the Bay Area where housing prices are among the highest in the nation.
“I’ve heard from reservists who have been deployed multiple times, saw a big loss in pay and they get in trouble with their home loans,” McNerney said.
The underlying bill revamps the Veterans Administration Home Loan Guaranty Service, which provides home loans to military personnel. The bill passed out of a subcommittee on Veterans Affairs on Wednesday and is headed to the full committee.
McNerney said he sought in his amendment to include veterans who already own homes but have fallen victim to the sub-prime mortgage crisis. It would allow them to refinance with VA-backed loans at more affordable interest rates.
“We have heard complaints about the low, $144,00 figure in the past, but now, it’s a crisis,” McNerney said. “We had bipartisan support for the legislation in the sub-committee and I can’t imagine why anyone would oppose it.”