I

103D CONGRESS

1ST SESSION H. R. 950

To amend title 38, United States Code, to provide mortgage payment assistance to avoid foreclosure of home loans guaranteed under title 38,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 17, 1993

Mr. SANGMEISTER introduced the following bill; which was referred to the

Committee on Veterans’ Affairs

A BILL

To amend title 38, United States Code, to provide mortgage

payment assistance to avoid foreclosure of home loans

guaranteed under title 38, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. MORTGAGE PAYMENT ASSISTANCE TO AVOID

4 FORECLOSURE OF HOME LOANS GUARAN5 TEED UNDER TITLE 38.

6 (a) IN GENERAL.—(1) Chapter 37 of title 38, United

7 States Code, is amended by inserting after section 3714

8 the following new section:
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1 ‘‘§ 3715. Loans to refinance delinquent indebtedness

2 ‘‘(a)(1) The Secretary may, at the Secretary’s option,

3 provide assistance to a veteran under this section for the

4 purpose of avoiding the foreclosure of a housing loan made

5 to that veteran and guaranteed by the Secretary under

6 section 3710 or 3712 of this title (hereinafter in this sec7 tion referred to as a ‘primary loan’).

8 ‘‘(2) Assistance under this section shall be in the

9 form of a loan to the veteran. Such assistance may be pro10 vided only if—

11 ‘‘(A) the dwelling that secures the primary loan

12 is the current residence of the veteran and is occu13 pied by the veteran as the veteran’s home;

14 ‘‘(B) the veteran is at least six months delin15 quent in payments on that primary loan;

16 ‘‘(C) the veteran has lost employment or has

17 had a substantial reduction in household income (as

18 defined in regulations prescribed by the Secretary)

19 through no fault of the veteran; and

20 ‘‘(D) the Secretary determines that there is a

21 reasonable prospect that the veteran will be able to

22 resume payment on the primary loan within six

23 months after receiving assistance under this section.

24 ‘‘(3) For the purposes of this section, the term ‘vet25 eran’ includes the surviving spouse of a veteran if the sur26 viving spouse was a co-obligor of the primary loan.
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1 ‘‘(b)(1) A loan under this section shall be advanced

2 to the holder of the primary loan. The amount of the loan

3 under this subsection shall first be applied to the amount

4 delinquent on the loan guaranteed under this chapter in5 cluding any amount delinquent on taxes, assessments, haz6 ard insurance, and late charges required by the holder to

7 be included in the veteran’s monthly payment on the mort8 gage.

9 ‘‘(2) The Secretary may make more than one loan

10 under this section to a veteran. The total amount of loans

11 under this section to any veteran may not exceed $10,000.

12 ‘‘(c) A loan under this section—

13 ‘‘(1) shall bear no interest until the date on

14 which payments on the primary loan (including

15 amounts for taxes, assessments, hazard insurance,

16 and late charges required by the holder to be in17 cluded in the veteran’s monthly payment on the

18 mortgage) are current;

19 ‘‘(2) shall be secured by a lien on the property

20 securing the primary loan and by such other security

21 as the Secretary may require; and

22 ‘‘(3) shall be subject to such additional terms

23 and conditions as the Secretary may require.

24 ‘‘(d) As a condition of receiving a loan under this sec25 tion the veteran shall execute an agreement, in such form
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1 as the Secretary may prescribe, to repay the loan within

2 a reasonable period of time, as determined by the Sec3 retary, not to exceed 15 years from the date on which such

4 loan is made. If the Secretary determines that the veteran

5 has sufficient income or other resources to do so, the Sec6 retary may require the veteran to make partial payments

7 on the primary loan guaranteed under this chapter during

8 the period the holder of that loan is applying the amount

9 of the loan under this section to payments becoming due

10 on the primary loan.

11 ‘‘(e) Notwithstanding any other law, the Secretary

12 may employ attorneys to bring suit to collect any amount

13 of a loan under this section on which the veteran to whom

14 the loan is made is in default.

15 ‘‘(f) The Secretary’s decisions on any question of law

16 or fact regarding assistance under this section, including

17 whether or not to grant such assistance and the terms and

18 conditions under which such assistance is granted or not

19 granted, shall be final and conclusive, and no other official

20 or any court of the United States shall have power or ju21 risdiction to review any such decision by an action in the

22 nature of mandamus or otherwise.

23 ‘‘(g) A loan under this section shall be made from

24 the fund established under section 3724 or 3725 of this

25 title that is available with respect to the primary loan in
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1 connection with which the loan is made under this sec2 tion.’’.

3 (2) The table of sections at the beginning of such

4 chapter is amended by inserting after the item relating

5 to section 3714 the following new item:

‘‘3715. Loans to refinance delinquent indebtedness.’’.

6 (b) EFFECTIVE DATE.—The amendments made by

7 subsection (a), shall take effect at the end of the 60-day

8 period beginning on the date of the enactment of this Act.

9 SEC. 2. FINANCING OF DISCOUNT POINTS.

10 Section 3703(c)(4)(B) of title 38, United States

11 Code, is amended in the second sentence by striking out

12 ‘‘Discount’’ and inserting in lieu thereof ‘‘Except in the

13 case of a loan for the purpose specified in section

14 3710(a)(8), 3710(b)(7), or section 3712(a)(1)(F) of this

15 title, discount’’.

16 SEC. 3. RATE ADJUSTMENTS FOR ADJUSTABLE RATE

17 MORTGAGES.

18 Section 3707(b)(2) of title 38, United States Code,

19 is amended by striking out ‘‘on the anniversary of the date

20 on which the loan was closed’’.

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