The current recession is being particularly hard on recent military veterans, whose unemployment rate is higher than that of others in their age group who did not serve. Fortunately, veterans who are having difficulty making their mortgage payments have some new tools available to help them.
According to a report in USA Today, the unemployment rate among Iraq and Afghanistan veterans rose 4 percentage points last year, to 11.2 percent. The comparable rate for non-veterans of similar ages is 8.4 percent. The report was based on Labor Department records and interviews with military officials.
Labor Department records show that, for the youngest group of Iraq and Afghanistan veterans, those aged 20-24, unemployment hit 15 percent in February, compared to 13.8 percent for non-veterans of the same age. This is despite measures to assist veterans in finding work, including preferential hiring for government service (GS) positions. A $2,400 per-person tax incentive for employers hiring unemployed veterans was enacted in February as part of the fiscal stimulus bill, but it may be too soon for it to have had an effect.
Under the Veterans' Benefits Improvement Act of 2008, signed into law by then-President Bush last October, veterans with conventional home loans have several new options for refinancing to a a Department of Veterans Affairs (VA) guaranteed home loan. Under the new law, veterans with a subprime or conventional loan may now obtain refinancing for up to 100 percent of the value of the property, up from the previous limit of 90 percent.
The law also raises the maximum VA loan amount to $729,750, depending on where the property is located, up from a previous limit of $144,000.
Veterans may also avail themselves of the governments new Making Home Affordable Plan, announced by President Obama earlier this month, which may allow for refinancing Fannie Mae and Freddie Mac mortgages at a lower rate, or for modifying mortgages for borrowers who are having difficulty meeting their payments.
The Veterans administration operates eight regional and two specialty loan centers to offer assistance to veterans with both VA-guaranteed and non-VA loans. For more information, go to go to www.homeloans.va.gov , or call (877) 827-3702.
For information on the government's new Making Home Affordable Plan, visit www.makinghomeaffordable.gov.