[Congressional Record Volume 148, Number 38 (Wednesday, April 10, 2002)]
[Extensions of Remarks]
[Page E491]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          VETERANS HOME LOAN PREPAYMENT PROTECTION ACT OF 2002

                                 ______
                                 

                            HON. LANE EVANS

                              of illinois

                    in the house of representatives

                       Wednesday, April 10, 2002

  Mr. EVANS. Mr. Speaker, I have recently introduced H.R. 4042, the 
``Veterans Home Loan Prepayment Protection Act of 2002'' to protect 
veterans by prohibiting additional and unfair interest charges to 
veterans when they prepay their Department of Veterans Affairs 
Guaranteed Home Loans in full, such as during loan reduction 
refinancing.
  Imperfections in existing law currently permit residential mortgage 
lenders under title 38 to select cutoff times for acknowledging receipt 
of prepayments in full for veterans. These cutoff times sometimes occur 
early in the business day and can permit interest to accrue on two 
different mortgage loans simultaneously until the prepayment in full is 
recorded on the following business day. This can be up to 90 dollars in 
extra cost to the veteran for a 24-hour delay and hundreds of dollars 
over an extended holiday weekend.
  This amounts to unfair enrichment for the lender. At least one case 
exists where a lender established a cutoff time for prepayments BEFORE 
the start of their business day. This lender was guaranteed at least 
one day of extra interest on every prepayment action without any 
additional risk!
  The provisions of H.R. 4042, require lenders to accept and record 
prepayments in full whenever the lender is open for business and an 
officer of the lender is present in an official capacity. If these 
conditions are met, the prepayment in full is recorded on that calendar 
day.
  There were over 77,000 VA loan refinances in 2001, and almost every 
one involved a prepayment in full. The amount of money involved is not 
overwhelming, yet we must ask, is this additional interest fair and 
should this burden be borne by those who have served? I urge my 
colleagues to support the ``Veterans Home Loan Prepayment Protection 
Act of 2002.''

                          ____________________