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Bill would ease refinancing for service members

Mar. 12, 2013 - 10:24AM   |  
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Two California lawmakers are launching a second try with legislation to make it easier for military homeowners to refinance even if they are not currently occupying the residence.

Reps. Susan Davis, a Democrat, and Duncan Hunter, a Republican, got their Fairness for Military Homeowners Act passed by the House of Representatives last year as part of the 2013 defense authorization bill, only to see the provision yanked from the final version of the bill because of a dispute over which congressional committees have jurisdiction.

The bill could be reintroduced as early as this week.

Davis and Hunter, both members of the House Armed Services Committee, are ready to try again, looking for bipartisan cosponsors and support for their bill from the House Veterans’ Affairs Committee, which is responsible for Servicemembers Civil Relief Act protections similar to what their plan would provide.

Their bill is aimed at service members who want to refinance a home they own but cannot live in because they are assigned to another permanent duty station. Most lenders provide the lowest possible interest rate for refinancing only for owner-occupied homes. Service members who are unable to live in a house because of military orders can refinance only at a higher percentage rate, which Davis and Hunter say is unfair.

The difference can be as much as 3 percentage points, resulting in hundreds of dollars’ difference in monthly mortgage payments.

Under the Davis-Hunter plan, a military homeowner who has owned property for at least 13 months but is not living there because of military orders would have to be treated during refinancing as if he were an owner-occupant.

This provision would apply to personal residences, including buildings of up for four units owned by a service member as long as the service member had resided in at least one of the units. It would not apply to other commercial property.

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