BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 697
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          Date of Hearing:   April 26, 2011

                       ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
                                 Paul J. Cook, Chair
                 AB 697 (V.M. Perez) - As Amended:  February 17, 2011
           
          SUBJECT  :   Veteran: acquisition of home: interest of record.

           SUMMARY  :   This bill allows the Department of Veterans Affairs 
          (Department) to acquire a home in which a veteran has an 
          interest of record.   Specifically,  this bill  :  
             1)   Authorizes the Department to acquire a home in which the 
               veteran has an interest for the purpose of refinancing an 
               existing mortgage loan; and
             2)   Removes all of the other exceptions to the prohibition 
               against acquiring a home in which a veteran has an 
               interest; and 
             3)   Requires the Department to adopt and publish 
               implementing rules and regulations.

           EXISTING LAW  Prohibits the Department from acquiring a home in 
          which a veteran has an interest of record, except in five 
          circumstances:
             1)   Where the application is for aid for the construction of 
               a home upon real property owned by the applicant and the 
               improvements to be constructed thereon have not reached 
               completion as evidenced by the issuance of a certificate of 
               occupancy; or
             2)   Where the veteran had no interest of record in the 
               property at the time of filing his or her application and 
               thereafter secured interim financing pending the processing 
               and approval of the application by the department; or
             3)   Where the application is for the purchase of a 
               mobilehome to be situated upon real property, or an 
               undivided interest therein, owned by the applicant; or
             4)   Where the applicant is an Indian veteran and the 
               application is for the construction of a dwelling house or 
               other improvements on, or for the purchase of a mobilehome 
               to be sited on, trust land in which the Indian veteran has 
               a beneficial interest or owns an interest of record; or
             5)   Where the application is for assistance to enable the 
               veteran to purchase his or her space, or share in a 
               mobilehome park, which is converted from a rental park to a 
               nonprofit corporate resident-owned park or subdivision, 
               cooperative, or condominium for mobilehomes, in which the 








                                                                  AB 697
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               veteran resides in his or her mobilehome.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :  The United States Department of Veterans Affairs 
          refinances loans but existing statutory provisions prohibit the 
          Department from doing the same.  This bill removes the 
          restriction prohibiting the Department from acquiring a home in 
          which a veteran already has an interest, thereby allowing the 
          Department to enter the refinance market.  According to the 
          Department, it is prohibited from refinancing its own CalVet 
          loans.  The refinancing contemplated by this bill will be for 
          existing loans, other than CalVet Loans.  This bill would widen 
          the ability of the Department to use CalVet funds and allow the 
          Department to move into an arena, refinancing, in which it has 
          not previously been involved.

          Policy Question: The bill as drafted removes all of the other 
          exceptions under which the Department may acquire an interest in 
          a property in which a veteran has an existing interest.  Some of 
          these exceptions may be worth retaining, for example, "Where the 
          applicant is an Indian veteran and the application is for the 
          construction of a dwelling house or other improvements on, or 
          for the purchase of a mobilehome to be sited on, trust land in 
          which the Indian veteran has a beneficial interest or owns an 
          interest of record." Should these exceptions be retained?


           REGISTERED SUPPORT / OPPOSITION :   

           Support 
           
          American Legion-Department of California, the AMVETS- Department 
          of California, California Association of Veterans Service 
          Officers, California State Commanders Veterans Council, and the 
          Vietnam Veterans of California.

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    John Spangler / V. A. / (916) 319-3550 











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