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
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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
AB 697
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