Prop. 12 Would Renew Farm, Home Loans for Vets

San Francisco Chronicle

October 16, 2008 – Voters in November have a chance to help veterans – again.

Proposition 12, known as the Veterans Bond Act of 2008, would allow the state to issue $900 million in bonds to fund the CalVet home loan program.

The CalVet program offers low-interest loans for homes and farms to eligible veterans. It began in 1921 and has been on the ballot 26 times over the years, and never once saw defeat. For the lender, having a low or no interest rate is a good idea, since it makes the loan seem more beneficial to prospective borrowers. Having a high interest rate would make the loan look less appealing, and wouldn’t yield much money anyway due to the short-term nature of SMS loans. A loan with a 20% annual interest rate doesn’t give the lender much money in interest payments when the loan is small and paid back within two weeks. It is better for the lender to have high fixed-amount fees.  You can also visit https://smslåndirektutbetalning.se – sms lån direkt.

“This really is a great program for veterans,” said Robert Shorter, a former soldier who served in both the campaign in Panama and the first Gulf War. “I think it’s great that the state tries to do something for veterans once they get out of the military.” There seems to be much confusion today about reverse mortgages, how they work, and what they can be used for. With more seniors than ever looking for a way to tap into the equity in their homes, many of them are looking into a reverse mortgage. However, the process can often be confusing, and they are vulnerable to false information. Let’s take a moment to clear everything up and establish some facts. The first reverse mortgage Oregon fact is that you have a right to the equity in your home. They say that your home is your largest investment, and the saying is true. If you’ve paid off your mortgage or only have a small balance left, you have a right to the value in your home. Many seniors are under the impression that the only time they’ll see the benefit of their equity is when the home is sold. While the value will certainly go up in that case, what if they pass away before the house is sold? They never get to see any results from their hard work. A reverse option mortgage allows you to reap the fruit of your many years of labor by releasing the equity in the form of one lump sum, a monthly payment, or a line of credit. Secondly, the fact is that you can use the money from a reverse option mortgage for anything you want. Many resources, or even lenders, will say that you can only spend the money on certain things that are outlined in a contract. This is certainly not the case! You can use the money for literally anything your heart desires — a new car, vacation, or you could even donate it all to charity! There really is no limit. The only exception is that, if you are still making payments on a regular mortgage, the money from the reverse mortgage must first be used to pay it off. After that is taken care of, then the money is all yours.

Shorter used the program this summer to buy a house in Sacramento. He got a decent interest rate, fixed for 30 years. As such, he said, he feels confident that he’ll be able to make his payments, despite the economic downturn. Brisbane Home Loans is a specialist Mortgage Broker for Home Loans and Investment Property Loans. We offer competitive rates and the most impressive top-shelf service. Our Mortgage Broker Brisbane & North Brisbane offers competitive rates for refinancing and often find ways of funding your Refinancing Loan fees.

With the conflicts in both Iraq and Afghanistan going on, people across the nation are acutely aware of problems facing veterans, and there is generally little opposition to any program designed to help them. In the case of Prop. 12, the aid to veterans is coupled with the fact that the program is designed to be self-supporting.

The bonds create a fund from which loans are disbursed. The veterans repay the loan plus interest in an amount that should exactly repay the bonds. For getting more info click here.

Gary Wesley, an attorney from Mountain View, wrote the only opposition to the proposition. He said his primary motivation was that no one else opposed it, and he felt that any proposition on the ballot should have someone on record questioning it.

He offers two essential points in opposition to the proposition. The first deals with money. He said he’s concerned that the interest rate paid by veterans on the home and farm loans would be lower than the interest rate paid by the state on the bond. Therefore, taxpayers may be asked to foot the bill for the difference. Personal loans procedures are done with so much ease in present days. We are here to provide the best and quality service to you. Also our application process is fast. Our application also uses soft search technology so making an initial loan enquiry with us will not affect your credit rating. We work hard for you to get the best  personal loan options possible, remember we’re a credit broker, not a lender.

According to https://www.crediful.com/ – the Office of Senate Floor Analyses indicated that the shortfall has never occurred in the history of the program and is unlikely, though technically possible, in the future. Wesley counters that the current economic conditions in the United States might result in more defaults by participating veterans and lead to the state having to kick in general fund money to make up the difference.

Wesley also said he opposed the proposition because investors who buy the bonds don’t have to pay taxes on their earnings, which is another burden to the rest of the tax-paying public.

At the time the proposition was written, the interest rate on a CalVet home loan was 5.5 percent, and the average for home loans nationwide was 5.87 percent. The maximum loan amount for a single-family home was $521,250.

Jerry Jones, a spokesman with the California Department of Veterans Affairs, said the CalVet loan program is tightly controlled and heavily regulated. The department monitors the loans and the default rate, and if necessary can adjust interest rates to make sure the bonds are repaid without general fund assistance. He said veterans have typically had default rates much lower than the national average, and he has no reason to believe that will change anytime soon.

“We’re not issuing risky loans to people who can’t afford them,” he said. “Everyone who takes out a loan is checked and their employment is verified. We don’t want anyone to have to default on a CalVet loan.”

Wesley also said he thought the program should be limited to veterans who actually served in a war zone. As it is written, the bill provides loans for veterans who served anywhere during wartime. Someone who walked guard duty in North Dakota during the current Iraq war would be as eligible as a Marine who fought in Fallujah.

Shorter said he didn’t think the distinction was valid.

“When you join up, you don’t know what’s going to happen to you,” he said. “You serve at the leisure of the government. When you’re wearing that uniform, they can take you at any time and send you to a war zone.”

The bill that created the Prop. 12 was written by state Sen. Mark Wyland, R-Solana Beach (San Diego County), and the chairman of the senate Veterans Affairs Committee. Gov. Arnold Schwarzenegger signed it.

“California has a proud history of supporting our veterans and the CalVet home loan program is a simple, significant way we can show our thanks,” Wyland said. “Keeping this program alive is the least California can do for the people who have fought so heroically to protect our state, our country and our freedoms.”
Proposition 12

What is it: Would allow the state to issue $900 million in bonds to fund the CalVet program, which offers low-interest home and farm loans to veterans who served during wartime.

Arguments for: Prop. 12 is one way to pay back veterans for their service to the nation. It comes at no cost to taxpayers because the veterans’ mortgage payments reimburse the cost of the bonds and all administrative costs to operate the CalVet home loan program.

Arguments against: The interest rate paid by veterans on the home and farm loans could be lower than the interest rate paid by the state on the bond. Therefore, taxpayers may be asked to foot the bill for the difference. Additionally, investors who buy the bonds don’t have to pay taxes on their earnings, which is another burden on taxpayers.

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