Hillary Clinton Campaign Press Release - Hillary Clinton's Plan to Protect America's Servicemembers from Foreclosure

For more than a year, Hillary Clinton has been fighting to solve the housing crisis and keep American families in their homes. And she has a long record of fighting for the men and women of our Armed Forces, Reserves, and National Guard – for better health care, job opportunities, and affordable homes. Recent reports indicate that a growing number of veterans and servicemembers are facing difficulties making their monthly mortgage payments and are struggling to keep their homes. One survey found that nearly half a million veterans are paying more than 50 percent of their income toward the home they own. [NAEH, Nov. 2007] USAA, which serves military members and their families, has reported an increase in mortgage delinquencies. And the Army and the Department of Veterans Affairs have indicated that they are dealing with a greater number of servicemembers facing home-finance problems and the threat of foreclosures. [USA Today, April 25, 2008.]

When our troops fight on behalf of our country, the least of their worries should be whether their home will be there when they get back. And yet, as the housing crisis grows, an increasing number of troops fighting on the frontlines are at risk of facing a battle back here at home – with lenders to avoid skyrocketing payments and losing their home to foreclosure. The least we can do for the brave young men and women in uniform who protect us is to protect their families and homes. No one fighting for our country overseas should have to worry about losing their home.

Today, Hillary Clinton is announcing new proposals to protect America's fighting men and women from foreclosure and to help them achieve the security of stable, affordable, fixed-rate mortgages. Her plan is builds on her comprehensive agenda to address the housing crisis.

1. Enforce an absolute moratorium on foreclosures while servicemembers are on combat tours of duty overseas and improve foreclosure protections for veterans returning home. In 2003, Congress passed the Servicemembers Civil Relief Act (SCRA) to help ease economic and legal burdens on active-duty military personnel. The SCRA offers important foreclosure protections for servicemembers to help them keep their homes, whether they are serving abroad or at a base here in the U.S. But the protections are not categorical and they have sometimes been ignored by lenders. They do not apply to mortgages taken out by members of the Armed Forces after they have joined their service. And lenders can still take military personnel to court – even those on tours of duty overseas – to try to get an order of foreclosure, forcing troops to ask for relief from the court. Hillary believes that not a single soldier, sailor, airman, or Marine should have their home foreclosed – or have to deal with lenders in court – while they are serving on the front lines in Iraq or Afghanistan or elsewhere. She will therefore enforce an absolute moratorium on any foreclosure proceedings against a servicemember's home during the period that he or she is on a tour of combat duty, increase penalties for lenders who attempt to violate the moratorium, and support and expand efforts initiated by Senator Bayh to educate troops about their rights. She will also work with lenders and servicers to implement an immediate freeze in interest rates on subprime adjustable rate mortgages.

At the same time, Hillary will improve existing SCRA foreclosure protections so that returning veterans have time to get their affairs in order when they come home. Those protections currently apply for only 90 days after a servicemember returns to inactive status. Hillary will extend that period to nine months – consistent with recent legislation – so that our men and women in uniform have enough time to work out mortgage difficulties that have arisen while they were serving our country.

2. Let servicemember or veterans with unaffordable subprime mortgages restructure their mortgage and stay in their homes. The director of the VA's loan guarantee service recently testified before a House committee on the challenges facing veterans and servicemembers who have taken out subprime mortgages and now face increasing payments and the threat of foreclosure. Current law contains restrictions that prevent many of these military families from using VA-backed loans to refinance or restructure their mortgages, including equity requirements and a refinancing loan limit of only $144,000. Hillary will ensure that every veteran or servicemember who lives in their home and who has been saddled with an unaffordable subprime, adjustable rate mortgage can move into a stable, affordable, fixed-rate mortgage backed by a government guarantees.

She will increase access to low-interest loans through the Veterans Affairs Home Loan Guaranty Loan Program, by permanently raising the maximum loan guarantee so that men and women in uniform can seek loans up to the Federal Housing Administration maximum – in some areas more than $700,000. Eligible families can use these guarantees to refinance or restructure an existing VA-backed or subprime mortgage, or to buy a new home.

She will relax the equity requirement that prevents some veterans from refinancing, eliminate the upfront fees on VA mortgages for veterans of the Iraq and Afghanistan wars who take out VA loans within two years of leaving active duty, reduce other fees and costs, and extend payment periods for remaining fees.

She will also give veterans and servicemembers the option of restructuring their mortgages through the new FHA guarantee program that she announced last month. This will provide veterans and servicemembers with a set of options on how to restructure troubled mortgages in the way that works best for them.

3. Provide free foreclosure and mortgage counseling services to all veterans and servicemembers. Hillary supports legislation to direct the Department of Defense to create a new financial counseling program for military families, including home foreclosure and mortgage counseling. She will devote funds from her $30 billion Emergency Housing Fund to help pay for this program as it is implemented through public/private and federal/local partnerships in communities across the country. Under Hillary's plan, every member of the Armed Forces, Reserves and National Guard and every veteran will have access to free counseling services for home finance.