VA publishes rule on cash-out home loans to protect vets

The U.S. Department of Veterans Affairs announced on Feb. 19 that it had published a final rule relating to VA-guaranteed cash-out refinance loans to further protect veteran home loan borrowers from predatory lending practices.

The VA's cash-out refinance loan gives qualified veterans the opportunity to refinance their conventional or VA loan into a lower rate while extracting cash from the home's equity. This should not be confused with a home equity loan, which is a second loan that runs alongside your current loan. The VA cash-out refinance loan replaces your existing mortgage instead of complementing it.

This rule provides new regulatory safeguards related to VA-guaranteed cash-out refinance loans, which generally allow borrowers to convert home equity into cash.

In many cases, the principal balance of the new refinance loan is larger than the payoff amount of the loan being refinanced. This means the veteran taking the loan will generally receive some amount of cash at closing, which can then be used at the veteran’s discretion to, for example, pay off debt, fund education or make home improvements.

VA’s cash-out home loan program may also be used to refinance a non-VA loan into a VA-guaranteed loan. Certain borrowers may use VA-guaranteed cash-out refinance loans to borrow up to 100 percent of the value of their home, which makes it the most competitive loan program available to veterans, according to the VA.

The rule will help protect veterans from predatory refinance practices and minimize risk to taxpayers and the secondary mortgage market. For example, the rule specifically requires that lenders disclose clearly, both at the time of application and again at closing, a plain comparison of the existing loan’s cost with that of the new loan. These disclosures are meant to help veterans understand the impact of the refinance loan, which is in line with VA’s current policy on Interest Rate Reduction Refinance Loans. That policy can be found online at benefits.va.gov/homeloans/irrrl.asp.

Further, the rule imposes loan "seasoning" and "net tangible benefit" standards. To meet the seasoning requirement, at least 210 days must pass and six monthly payments must be made on a loan prior to refinancing the existing loan. The cash-out refinance loan must also provide the veteran with at least one of eight "net tangible benefits" defined by VA in the rule. This is explained online at https://mortgageorb.com/whats-the-net-tangible-benefit-test.

Since 1944, VA has guaranteed more than 23 million home loans worth more than $2 trillion. Veterans with questions about the VA Home Loan Program may call (877) 827-3702. For more information on the VA Home Loan program, visit benefits.va.gov/homeloans.

Campaign discourages

smokeless tobacco use

The U.S. Department of Veterans Affairs announced in late February that it will call attention to the dangers of using smokeless tobacco with its "Better Starts Today" campaign. It encourages veterans who use tobacco products, including smokeless tobacco, to stop dipping or chewing for at least one day, and take advantage of VA tools to help them succeed, with the hope that they may choose to quit permanently.

Resources to help veterans quit smokeless tobacco include a program called Quit VET, a toll-free national Quitline, at (855) QUIT-VET or (855) 784-8838, for veterans to speak with a tobacco cessation counselor, make a quit plan and receive ongoing counseling after the quit date. Counselors are available from 9 a.m. to 9 p.m. Monday through Friday.

Also, SmokefreeVET, a text message program (text VET to 47848) offers veterans three to five support texts a day, with advice and encouragement to help them while they stop using tobacco. Veterans may also text the keywords URGE, STRESS and DIPPED anytime to receive an immediate tip for coping with an urge to use, a slip or stress.

A 2015 Centers for Disease Control survey estimated 29.2 percent of American veterans use at least one tobacco product, with 5.2 percent using smokeless tobacco. Smokeless tobacco is associated with mouth and esophageal cancer, heart disease, stroke, tooth decay and receding gums.

VA providers offer individual counseling, group classes, phone and telehealth clinics and FDA-approved medications. For more information and resources about tobacco cessation and how families and friends of veterans can help, visit mentalhealth.va.gov/quit-tobacco.

TV interviews

with veterans

Nathan Stein, staff psychologist at the Providence VA Medical Center, in collaboration with East Bay Television, has begun taping monthly episodes of the "Veterans Discuss the Burdens of War" television show. Two veterans are interviewed for 15 minutes each about their experiences in war, the burdens they carry and how they cope with them.

Stein hopes to increase public awareness of the sacrifices that service members and veterans have made and to stimulate conversations between service personnel and civilians. He also wants more veterans to share their stories with others and to ask for help when they need it. The show airs on Statewide Interconnect Channel A (Cox Channel 13, Full Channel 13, Verizon Channel 32) at 5:30 p.m. Sundays and 9 p.m. Mondays. For more information, email nathan.stein@va.gov. or call Brian Medeiros, PEG R.I.TV Access Coordinator, at (401) 293-0806.

Meetings

— American Legion East Greenwich Post 15, 7 p.m. Monday, March 4, 1016 Main St.

— Veterans of Foreign Wars: North Kingstown Memorial Post 152, 7 p.m. Monday, March 4, North Kingstown Senior Center, 44 Beach St.; Washington County Post 916 Auxiliary, 5:30 p.m. Friday, March 8, 155 High St., South Kingstown.

— Marine Corps League Kent County Detachment, 7 p.m. Wednesday, March 6, for officer nomination and election, VFW Post 449, 197 Providence St., West Warwick.

— The United Veterans Council of Rhode Island, 6 p.m. Thursday, March 7, Powers Building, second floor conference room, 1 Capitol Hill, Providence.

— Pawtucket Veterans Council, 2 p.m. Friday, March 8, Gatchell VFW Post 306, 171 Fountain St., Pawtucket.

— Rhode Island National Guard Retirees Association quarterly meeting, 9 a.m. registration and coffee, 10 a.m. business meeting with a guest speaker Saturday, March 9, Schofield Armory, 705 New London Ave., Cranston.

Send veterans’ meeting and news items to George W. Reilly at VeteransColumn@gmail.com