BILL ANALYSIS                                                                                                                                                                                                    Ó






                      SENATE COMMITTEE ON VETERANS AFFAIRS
                              LOU CORREA, CHAIRMAN
                                             


          Bill No:        AB 697
          Author:         V. Manuel Perez
          Version:        As Amended May 4, 2011
          Hearing Date:   June 14, 2011
          Fiscal:         Yes
          Consultant:     Donald E. Wilson




                                 SUBJECT OF BILL  
          
          Veterans Home Loans  
           
                                   PROPOSED LAW  
                                         
           Allow modification of Cal-Vet home loans.
           
                          EXISTING LAW AND BACKGROUND  
          
          1.  At the end of WWI, all states gave some sort of 
          compensation to their returning veterans.  Compensation 
          took several forms including cash bonuses.  California was 
          one of five states that decided home ownership for veterans 
          would be the chosen program.

          2.  Twenty-two veterans bonds have been passed since 1943 
          to guarantee the funding of the Cal-Vet program.  The last 
          veterans' bond to pass was Proposition 32 of 2000.  A 
          $102,000,000 authorization is left from that bond.

          3.  Post 1977 veterans were not able to exercise the same 
          advantages of this program because Congress had not renewed 
          the law for recent veterans.  When the Federal Law was 
          changed, possible new loans for post 1977 veterans were 
          funded by Proposition 12 of 2008.  ÝSB 1572 of 2008 
          (Wyland)] 


                                         
                                    COMMENT  









          
          1. Most Cal-Vet home loans cannot be modified due to the 
          fact that the loans are issued by the California Department 
          of Veterans Affairs (CDVA) underwritten by Qualified 
          Veteran Mortgage Bonds (QVMB).  Modifying loans would then 
          be considered a gifting of public funds by CDVA.

          2.  This bill would allow CDVA to offer to veterans that 
          are in "toxic loans", such as those with giant balloon 
          payments, an alternative to foreclosure by allowing CDVA 
          for the first time to write a loan on an owner/occupied 
          property that already has a loan attached to it. 

                                     SUPPORT  
          
          American Legion, Department of California
          AMVETS, Department of California
          California Association of County Veterans Service Officers
          California State Commanders Veterans Council
          United Veteran's Council of Imperial County
          Vietnam Veterans of America-California State Council

                                      OPPOSE  
          
          None received



















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