[Congressional Record Volume 154, Number 92 (Thursday, June 5, 2008)]
[Senate]
[Pages S5210-S5211]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE:
  S. 3087. A bill to amend title 38, United States Code, to make 
certain improvements in the home loan guaranty programs administered by 
the Secretary of Veterans Affairs, and for other purposes; to the 
Committee on Veterans' Affairs.
  Ms. SNOWE. Mr. President, I rise today to introduce legislation that 
would expand and strengthen the guaranteed home loan program 
administered by the Department of Veterans' Affairs. This action is 
particularly timely given the many readjustment challenges faced by our 
veterans and their families in this time of war, challenges that have 
been compounded for veterans by the current subprime mortgage market 
crisis and credit crunch. Mr. President, this legislation is intended 
to be the companion legislation to H.R. 4884, Helping Our Veterans Keep 
Their Homes Act of 2008, introduced in the House by Chairman Filner of 
the House Veterans' Affairs Committee.
  For some time, we have heard from many veterans that the current 
structure of the VA Home Loan guarantee program has not been responsive 
to the needs of veterans in today's market. For example, the current 
home loan limit is $417,000. Unfortunately, in many states with the 
largest population of veterans, reservists, and active duty personnel, 
the average home price is well above the national average and above the 
current loan ceiling. In contrast, the Federal Housing Authority home 
loan program constrains the loan dollar value by State and county. I 
strongly believe that veterans and service members should not be 
penalized for geographic differences in the housing market--
particularly when, for many, where they live is not of their own 
choosing but directed by the military organization in which they are 
serving in the defense of the Nation.
  We have also learned that for veterans and lenders, the VA loan 
process can be costly, both with respect to personal finance and time. 
The fees that are required for participation in the program impose 
costs on the veteran and family that reduce the financial 
attractiveness of the VA loan. In fact, it has been suggested that 
those fees, the bureaucratic red-tape, and the loan dollar value 
constraints that I previously noted, contributed to the conditions that 
resulted in far too many veterans being steered toward subprime loans 
in the first place.
  Equally disturbing are reports that veterans and reservists did not 
have access to prime rate loans because of the tumult created in their 
lives due to repeated deployments to Iraq, Afghanistan, or both. 
Unbelievably, despite their wartime service, these patriots were 
assessed to have less than the desired level of personal financial 
stability sought by prime rate lenders and received low credit scores. 
With access to prime loans limited, subprimes became an option of 
necessity for many veterans.
  What has become a point of frustration for veterans now trapped in 
the mortgage debacle is that the guaranteed home loan program is 
limited in its ability to provide relief for veterans who have fallen 
victim to unscrupulous lenders who prey on military families.
  Given the sacrifices of our veterans and their families, and the 
disruption

[[Page S5211]]

in their lives created when they patriotically answer their Nation's 
call to service, we must do better by our veterans by providing a 
readjustment benefit that reflects the realities of today's housing 
market. The legislation that I am introducing today would provide for 
the following: (1) increase the maximum home loan guarantee amount to 
$729,750; (2) decrease the equity requirement to refinance a home loan; 
(3) require the VA Secretary to review and streamline the process of 
using a guaranteed home loan to purchase a condominium; (4) eliminate 
the home loan funding fees; (5) reduce the home loan refinance fees to 
one percent; (6) extend the adjustable rate mortgage demonstration 
project to 2018; (7) extend the hybrid adjustable rate mortgage 
demonstration project to 2012; (8) raise the maximum loan guarantee for 
refinancing a home to $729,750; and (9) authorize the VA to offer a 30 
percent guaranty for loans made on homes determined by VA and HUD to be 
affordable housing.
  Clearly, this is the right thing to do. I should note that this 
legislation is supported by the veterans' services organizations, 
including the Veterans of Foreign Wars and the American Legion. I 
sincerely hope that my colleagues will join me and offer their support 
for this important legislation.
                                 ______