Mortgage insurer, struggling to regain footing in wake of AIG collapse, is mulling 'strategic alternatives' for its U.S. mortgage business.
September 30, 2008: 9:43 AM ET
RICHMOND, Va. (AP) -- Mortgage insurer Genworth Financial Inc. said Tuesday that it is considering various strategic alternatives for its U.S. mortgage-insurance business including a possible spin off, sending shares sharply higher in premarket activity.
"We have demonstrated that, in the current stressed U.S. housing environment, our U.S. Mortgage Insurance business continues to operate from a more sound financial position and lower risk profile than any other U.S. mortgage insurer," said Michael D. Fraizer, chairman and chief executive, in a statement.
"At the same time, progress in our international, wealth management, retirement, life and long-term care insurance businesses has been overshadowed by concerns about the future of U.S. mortgage insurance," he added.
Commercial paper
Genworth (GNW, Fortune 500) said it has reduced its commercial paper borrowings to $79 million, and maintains more than $800 million in cash and cash equivalents at the holding company.
The company also carries nearly $4 billion of cash and cash equivalents in its operating companies, and maintains substantial credit facilities, Genworth said.
Over the past couple of weeks, Genworth's stock has been hit hard by concerns about its mortgage exposure in the wake of the collapse of American International Group Inc.
Earlier this month, the government stepped in and provided AIG with a two-year $85 billion loan to help keep it in business. As one of the world's largest insurers, AIG teetered on the brink of bankruptcy as it looked for fresh cash to help shore up its balance sheet, which was facing a liquidity crunch amid the continued downturn in the credit markets.
Reinsurance business
Last week, Genworth management provided an update regarding its U.S. mortgage insurance business. The company is considering reinsurance transactions, asset transfers from outside the U.S. and joint ventures to boost capital, management said on a call with analysts.
Shares of Genworth spiked $1.49, or 30%, to $6.49 in premarket activity. The stock, which finished Monday's trading at $5, has ranged from $3.51 to $32.33 over the past year.
Friday, October 10, 2008
Mortgage aid program launches
The $300B initiative will help borrowers who spend more than 31% of their income on mortgage payments.
Last Updated: October 1, 2008: 2:53 PM ET
WASHINGTON (AP) -- The government kicked off a program Wednesday that aims to prevent foreclosures by letting an estimated 400,000 troubled homeowners swap their mortgages for more affordable loans.
Lenders, rather than borrowers, will decide whether to participate in the program, which requires them to take a loss on the initial loan. The $300 billion, three-year program is designed to help borrowers who owe more on their loans than their homes are worth.
To qualify, borrowers must be spending more than 31% of their income on mortgage payments. Loans made this year are excluded, except for those completed on Jan 1. Borrowers must have made six months of payments on their loans.
"For homeowners in trouble, this may be the help that they need," Housing and Urban Development Secretary Steve Preston said Wednesday. Officials did not have an updated estimate of how many homeowners were likely to qualify, beyond the Congressional Budget Office's projection from earlier this year that 400,000 borrowers would participate.
The program, dubbed 'Hope for Homeowners,' was passed by Congress this summer as part of a massive housing bill. It is one of several government efforts to stem the mortgage crisis.
Critics, however, call the government's actions sluggish and inadequate. Earlier action to modify loans, they say, might have prevented a $700 billion financial industry bailout now being debated in Washington.
Executives from Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and Wells Fargo (WFC, Fortune 500) told lawmakers last month they have been hiring additional workers to put the new program in place.
Still, it is unclear whether the industry will embrace the plan fully. One concern is that investors in mortgage securities must take an immediate loss and can't recoup their lost money if home prices turn upward again.
Investors would rather modify loans in ways that maintain the ability to "share in future appreciation," JPMorgan Chase executive Marguerite Sheehan said in written testimony submitted to House lawmakers last month.
On Monday, a group of state banking and law enforcement officials released a report that said nearly 80% of borrowers with subprime loans were not on track for assistance to avoid foreclosure as of May.
The report by the State Foreclosure Prevention Working Group criticized the lending industry for making only small changes to loan terms and noted that about one in five loans that were modified over the past year became delinquent again.
"While banks and Wall Street firms continue to report record write-downs of mortgage loan portfolios and securities, the losses do not appear to be flowing down to homeowners in the form of sustainable loan modifications," Iowa Attorney General Tom Miller, a founder of the state effort, said in a statement.
Last Updated: October 1, 2008: 2:53 PM ET
WASHINGTON (AP) -- The government kicked off a program Wednesday that aims to prevent foreclosures by letting an estimated 400,000 troubled homeowners swap their mortgages for more affordable loans.
Lenders, rather than borrowers, will decide whether to participate in the program, which requires them to take a loss on the initial loan. The $300 billion, three-year program is designed to help borrowers who owe more on their loans than their homes are worth.
To qualify, borrowers must be spending more than 31% of their income on mortgage payments. Loans made this year are excluded, except for those completed on Jan 1. Borrowers must have made six months of payments on their loans.
"For homeowners in trouble, this may be the help that they need," Housing and Urban Development Secretary Steve Preston said Wednesday. Officials did not have an updated estimate of how many homeowners were likely to qualify, beyond the Congressional Budget Office's projection from earlier this year that 400,000 borrowers would participate.
The program, dubbed 'Hope for Homeowners,' was passed by Congress this summer as part of a massive housing bill. It is one of several government efforts to stem the mortgage crisis.
Critics, however, call the government's actions sluggish and inadequate. Earlier action to modify loans, they say, might have prevented a $700 billion financial industry bailout now being debated in Washington.
Executives from Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and Wells Fargo (WFC, Fortune 500) told lawmakers last month they have been hiring additional workers to put the new program in place.
Still, it is unclear whether the industry will embrace the plan fully. One concern is that investors in mortgage securities must take an immediate loss and can't recoup their lost money if home prices turn upward again.
Investors would rather modify loans in ways that maintain the ability to "share in future appreciation," JPMorgan Chase executive Marguerite Sheehan said in written testimony submitted to House lawmakers last month.
On Monday, a group of state banking and law enforcement officials released a report that said nearly 80% of borrowers with subprime loans were not on track for assistance to avoid foreclosure as of May.
The report by the State Foreclosure Prevention Working Group criticized the lending industry for making only small changes to loan terms and noted that about one in five loans that were modified over the past year became delinquent again.
"While banks and Wall Street firms continue to report record write-downs of mortgage loan portfolios and securities, the losses do not appear to be flowing down to homeowners in the form of sustainable loan modifications," Iowa Attorney General Tom Miller, a founder of the state effort, said in a statement.
Commercial Briefs
MBA (10/9/2008 ) Murray, Michael
Pennsylvania Real Estate Investment Trust obtained $40 million of additional funding under a previously announced unsecured term loan. New lenders to the term loan, led by Wells Fargo NA, San Francisco, include National City Bank, Harleysville National Bank and Trust Co., and Citicorp North America Inc., New York.
The term loan's total outstanding balance is $170 million. The REIT has swapped $130 million of the loan to an average fixed rate of 5.33 percent. The remaining $40 million bears interest at the stated term loan rate of LIBOR plus 2.5 percent.
Pennsylvania REIT also exercised a 14-month extension to the term of its $500 million senior unsecured credit facility. The new expiration date is in March 2010. The revolving credit facility bears interest at LIBOR plus 1.40 percent.
*****
Citizens Bank, Providence, R.I., and Bank of America, Charlotte, N.C., provided $80 million to STAG Capital Partners, Boston, to finance the company’s fourth realty investment fund acquisition, consisting of warehouse, flex, manufacturing and office building properties.
Citizens Bank served as the agent and Bank of America as the co-agent on the financing deal. STAG Capital Partners acquires and manages single-tenant, net leased real estate assets purchased through third-party transactions and corporate sale-leasebacks.
*****
Green Park Financial, Bethesda, Md., partnered with Bethesda-based J.S. Watkins Partners to purchase multifamily small loan pools from commercial banks and other financial institutions that cannot be sold to government sponsored enterprises in current markets because of size limitations.
J.S. Watkins would source transactions, and Green Park Financial would aggregate pools and sell them to Fannie Mae.
“There is inefficiency in secondary markets for small loan pools under $100 million,” said Howard Smith, COO of Green Park Financial, “We are launching this program with J.S. Watkins to provide smaller banks and institutions with capital and access that they would be challenged to find without a program like this.”
Pennsylvania Real Estate Investment Trust obtained $40 million of additional funding under a previously announced unsecured term loan. New lenders to the term loan, led by Wells Fargo NA, San Francisco, include National City Bank, Harleysville National Bank and Trust Co., and Citicorp North America Inc., New York.
The term loan's total outstanding balance is $170 million. The REIT has swapped $130 million of the loan to an average fixed rate of 5.33 percent. The remaining $40 million bears interest at the stated term loan rate of LIBOR plus 2.5 percent.
Pennsylvania REIT also exercised a 14-month extension to the term of its $500 million senior unsecured credit facility. The new expiration date is in March 2010. The revolving credit facility bears interest at LIBOR plus 1.40 percent.
*****
Citizens Bank, Providence, R.I., and Bank of America, Charlotte, N.C., provided $80 million to STAG Capital Partners, Boston, to finance the company’s fourth realty investment fund acquisition, consisting of warehouse, flex, manufacturing and office building properties.
Citizens Bank served as the agent and Bank of America as the co-agent on the financing deal. STAG Capital Partners acquires and manages single-tenant, net leased real estate assets purchased through third-party transactions and corporate sale-leasebacks.
*****
Green Park Financial, Bethesda, Md., partnered with Bethesda-based J.S. Watkins Partners to purchase multifamily small loan pools from commercial banks and other financial institutions that cannot be sold to government sponsored enterprises in current markets because of size limitations.
J.S. Watkins would source transactions, and Green Park Financial would aggregate pools and sell them to Fannie Mae.
“There is inefficiency in secondary markets for small loan pools under $100 million,” said Howard Smith, COO of Green Park Financial, “We are launching this program with J.S. Watkins to provide smaller banks and institutions with capital and access that they would be challenged to find without a program like this.”
Reverse Mortgages Emphasize Affordability, Liquidity
MBA (10/9/2008 ) Murray, Michael
In an uncertain credit market, reverse mortgages that feature no monthly payments provide an option that increases affordability and liquidity.
“There could be a lot of reverse mortgage business driven by losses people are taking in the stock market—they do not have enough investments to get dividends to live on—and they are taking other losses,” said Mark Helm, COO at Reverse Mortgage Solutions Inc., Spring, Texas. “And expenses—everything is going up. Retired persons are paying more money for everything from utilities to groceries. Vehicles such as 401(k)s are for long-term investment and, all of a sudden, 50 percent or more of its value is lost, what other vehicle is available to turn to other than equity in the home?”
A report last year from AARP International said only 1 percent of older households in the United States had a reverse mortgage, but the share of individuals ages 45 and older who heard of reverse mortgages increased from 51 percent in 1999 to 70 percent in 2007. The share of respondents who said they were willing to consider a reverse mortgage in the future, however, declined from 19 percent to 14 percent.
At the Mortgage Bankers Association’s recent Fall Reverse Mortgage Lending Conference, Ginnie Mae president Joseph Murin said the agency would like to increase FHA HECM securities, and he emphasized a REMIC product that would blend forward and reverse mortgages together.
“That’s an extended breath of life to the reverse [mortgages] because they could be attached to a REMIC that has both traditional forward mortgages in it and reverses in it,” Helm said. “It was a real positive message from HUD here and Ginnie Mae about the future of the HECM mortgage regardless of what is happening with the rest of the lending industry.”
An investor purchasing a forward and reverse mortgage on the same REMIC would benefit from an annuity growing, compounding interest, on the HECM and in retrieving payment from the forward mortgage. It would include two different mortgages from two different borrowers into one security in an attempt to increase interest from investors.
“It makes the cash stream and the investment stream work together,” Helm said.
Lenders participating in HECMs must be FHA-approved, which could likely include larger banks and credit unions. Helm said lenders processing an FHA-insured loan should be able to sell that product to a conduit instead of a Wall Street-funded or bank-funded product.
“Fannie [Mae] and Freddie [Mac] are both more willing to purchase this product than some products determined to be more risk,” Helm said.
Ken Austin, president of RMS, said certain residential market segments—California, Arizona, Michigan and Florida—continue to depreciate, but FHA HECM program is unlikely to be disrupted.
Austin said the new loan limits—$417,000—help open up the market more. Fannie Mae recently asserted that it is “business as usual” for reverse mortgages.
However, Helm noted that “credit across the board, even in our industry, is hurting right now. If you have a ‘mortgage’ in your name, it is hard to get credit lines, it is hard to find warehouse lines and it is hard to find people who want to buy mortgage servicing. We do believe that the viability of the reverse mortgage is going to break some cash out that has not been typically broken out and add to the economy. That is going to be helpful.”
Some barriers remain, some upfront: most borrowers face a $2,500 fee with the product as the result of government insurance. “That is what makes the product available, but that is also what makes it expensive,” Austin said.
“Everybody wants to think of this loan as a HELOC and even on the simplest HELOCs [borrowers] at least have to pay interest on those loans. This—they don’t have to pay a dime. They just have to pay taxes and insurance,” Helm said.
Kevin Gherardi, CIO at RMS, said the reverse mortgage industry had done a “full circle,” from FHA HECM to proprietary reverse mortgage products and back to basics—99.9 percent HECM product availability.
“In the beginning, there was really only one investor, which was Fannie Mae,” Gherardi said. “Over the years, Wall Street was wide open and they were purchasing reverse mortgages. Today, basically, we are back again full circle where investor opportunities for purchasing HECMs are back to Fannie.”
“That is why it is so important to have the technology available [for reverse mortgages],” Helm said. “These players who have been sitting on the sidelines can now take advantage of the market and the technology that is available.”
In an uncertain credit market, reverse mortgages that feature no monthly payments provide an option that increases affordability and liquidity.
“There could be a lot of reverse mortgage business driven by losses people are taking in the stock market—they do not have enough investments to get dividends to live on—and they are taking other losses,” said Mark Helm, COO at Reverse Mortgage Solutions Inc., Spring, Texas. “And expenses—everything is going up. Retired persons are paying more money for everything from utilities to groceries. Vehicles such as 401(k)s are for long-term investment and, all of a sudden, 50 percent or more of its value is lost, what other vehicle is available to turn to other than equity in the home?”
A report last year from AARP International said only 1 percent of older households in the United States had a reverse mortgage, but the share of individuals ages 45 and older who heard of reverse mortgages increased from 51 percent in 1999 to 70 percent in 2007. The share of respondents who said they were willing to consider a reverse mortgage in the future, however, declined from 19 percent to 14 percent.
At the Mortgage Bankers Association’s recent Fall Reverse Mortgage Lending Conference, Ginnie Mae president Joseph Murin said the agency would like to increase FHA HECM securities, and he emphasized a REMIC product that would blend forward and reverse mortgages together.
“That’s an extended breath of life to the reverse [mortgages] because they could be attached to a REMIC that has both traditional forward mortgages in it and reverses in it,” Helm said. “It was a real positive message from HUD here and Ginnie Mae about the future of the HECM mortgage regardless of what is happening with the rest of the lending industry.”
An investor purchasing a forward and reverse mortgage on the same REMIC would benefit from an annuity growing, compounding interest, on the HECM and in retrieving payment from the forward mortgage. It would include two different mortgages from two different borrowers into one security in an attempt to increase interest from investors.
“It makes the cash stream and the investment stream work together,” Helm said.
Lenders participating in HECMs must be FHA-approved, which could likely include larger banks and credit unions. Helm said lenders processing an FHA-insured loan should be able to sell that product to a conduit instead of a Wall Street-funded or bank-funded product.
“Fannie [Mae] and Freddie [Mac] are both more willing to purchase this product than some products determined to be more risk,” Helm said.
Ken Austin, president of RMS, said certain residential market segments—California, Arizona, Michigan and Florida—continue to depreciate, but FHA HECM program is unlikely to be disrupted.
Austin said the new loan limits—$417,000—help open up the market more. Fannie Mae recently asserted that it is “business as usual” for reverse mortgages.
However, Helm noted that “credit across the board, even in our industry, is hurting right now. If you have a ‘mortgage’ in your name, it is hard to get credit lines, it is hard to find warehouse lines and it is hard to find people who want to buy mortgage servicing. We do believe that the viability of the reverse mortgage is going to break some cash out that has not been typically broken out and add to the economy. That is going to be helpful.”
Some barriers remain, some upfront: most borrowers face a $2,500 fee with the product as the result of government insurance. “That is what makes the product available, but that is also what makes it expensive,” Austin said.
“Everybody wants to think of this loan as a HELOC and even on the simplest HELOCs [borrowers] at least have to pay interest on those loans. This—they don’t have to pay a dime. They just have to pay taxes and insurance,” Helm said.
Kevin Gherardi, CIO at RMS, said the reverse mortgage industry had done a “full circle,” from FHA HECM to proprietary reverse mortgage products and back to basics—99.9 percent HECM product availability.
“In the beginning, there was really only one investor, which was Fannie Mae,” Gherardi said. “Over the years, Wall Street was wide open and they were purchasing reverse mortgages. Today, basically, we are back again full circle where investor opportunities for purchasing HECMs are back to Fannie.”
“That is why it is so important to have the technology available [for reverse mortgages],” Helm said. “These players who have been sitting on the sidelines can now take advantage of the market and the technology that is available.”
Unstable Assets, Tight Credit Add to Global Economic Woes
MBA (10/9/2008 ) Sorohan, Mike; Murray, Michael
Despite a 50 basis point cut in the federal funds rate, as well as actions taken by nearly two dozen other central banks, global economies continued to suffer from widespread turbulence.
The U.S. stock market, rallying briefly following the Federal Open Market Committee announcement, continued their rollercoaster ride yesterday, finishing nearly 200 points lower than Tuesday. The Dow Jones Industrial Average has lost substantial value—exactly one year ago, the Dow Jones reached its highest level ever, topping 14,000; yesterday, the Dow Jones finished at 9,258.
Treasury Secretary Henry Paulson Jr. said yesterday that U.S. and global financial markets continue to be “severely strained.”
“A chain of events caused by the ongoing housing correction has reverberated through U.S. banks and financial institutions and has seriously impacted the underlying economy, reaching American households and businesses,” Paulson said. “A root cause of this situation is the housing correction and a lack of confidence in mortgage assets, as well as a lack of confidence in many of the financial institutions that hold these assets. Because of this widespread uncertainty, investors are hesitant to commit capital to financial institutions. Investor confidence is critical to restore liquidity and enhance the stability of our financial system.”
Part of the problem, said Scott Baret, partner of regulatory and capital markets at Deloitte & Touche LLP, New York, is the lock-up of the financial credit markets. Inability to stablize on balance-sheet values, inability to sell those assets and borrower difficulty finding financing contribute to instability, despite the efforts of the federal government.
"The reality is that all operating models, not only financial institutions but also commercial entities that have been instructed to operate in an environment where credit is normally available, right now—in the short-term, medium-term and long-term markets--it is not available," Baret said. "The fundamental reason credit is not available is that there is a mistrust between banks because of a lack of asset stabilization."
“The risk is going to be—is there enough capital there to support the cost of funds going forward from these sources of money,” said Mark Peterson, managing director at Black Rock, New York.
Baret said residential market ramifications on securitized products present a key for solving the economic crisis and until residential real estate stabilizes, the crisis will continue.
"The toga party that existed pre-2007 has ended—has gotten to where we are now—and the hangover is something that is over the economy right now, and the economic consequences are slowly rippling through,” Baret said.
While residential mortgage delinquencies and foreclosures impact the economy, Baret said they also provide a litmus test on asset stabilization because unstable assets exist in residential and institutional markets.
"We are where we are right now,” Baret said. “The question is—what comes next.”
Paulson said the federal government would continue to take action at stabilizing the markets. “This financial market turmoil is now directly affecting more families and businesses. When banks can not finance at reasonable levels, and can not or are not willing to lend, everyone in our economy who depends on credit suffers. The capital markets are the pipes through which money flows to finance student loans, car loans, home loans and small businesses' payroll and inventory. And uncertainty and a lack of confidence have clogged our basic financial plumbing. While our actions have been aimed at restoring financial markets and institutions, our purpose is to prevent financial market difficulties from further impacting businesses and families across the country.”
Despite a 50 basis point cut in the federal funds rate, as well as actions taken by nearly two dozen other central banks, global economies continued to suffer from widespread turbulence.
The U.S. stock market, rallying briefly following the Federal Open Market Committee announcement, continued their rollercoaster ride yesterday, finishing nearly 200 points lower than Tuesday. The Dow Jones Industrial Average has lost substantial value—exactly one year ago, the Dow Jones reached its highest level ever, topping 14,000; yesterday, the Dow Jones finished at 9,258.
Treasury Secretary Henry Paulson Jr. said yesterday that U.S. and global financial markets continue to be “severely strained.”
“A chain of events caused by the ongoing housing correction has reverberated through U.S. banks and financial institutions and has seriously impacted the underlying economy, reaching American households and businesses,” Paulson said. “A root cause of this situation is the housing correction and a lack of confidence in mortgage assets, as well as a lack of confidence in many of the financial institutions that hold these assets. Because of this widespread uncertainty, investors are hesitant to commit capital to financial institutions. Investor confidence is critical to restore liquidity and enhance the stability of our financial system.”
Part of the problem, said Scott Baret, partner of regulatory and capital markets at Deloitte & Touche LLP, New York, is the lock-up of the financial credit markets. Inability to stablize on balance-sheet values, inability to sell those assets and borrower difficulty finding financing contribute to instability, despite the efforts of the federal government.
"The reality is that all operating models, not only financial institutions but also commercial entities that have been instructed to operate in an environment where credit is normally available, right now—in the short-term, medium-term and long-term markets--it is not available," Baret said. "The fundamental reason credit is not available is that there is a mistrust between banks because of a lack of asset stabilization."
“The risk is going to be—is there enough capital there to support the cost of funds going forward from these sources of money,” said Mark Peterson, managing director at Black Rock, New York.
Baret said residential market ramifications on securitized products present a key for solving the economic crisis and until residential real estate stabilizes, the crisis will continue.
"The toga party that existed pre-2007 has ended—has gotten to where we are now—and the hangover is something that is over the economy right now, and the economic consequences are slowly rippling through,” Baret said.
While residential mortgage delinquencies and foreclosures impact the economy, Baret said they also provide a litmus test on asset stabilization because unstable assets exist in residential and institutional markets.
"We are where we are right now,” Baret said. “The question is—what comes next.”
Paulson said the federal government would continue to take action at stabilizing the markets. “This financial market turmoil is now directly affecting more families and businesses. When banks can not finance at reasonable levels, and can not or are not willing to lend, everyone in our economy who depends on credit suffers. The capital markets are the pipes through which money flows to finance student loans, car loans, home loans and small businesses' payroll and inventory. And uncertainty and a lack of confidence have clogged our basic financial plumbing. While our actions have been aimed at restoring financial markets and institutions, our purpose is to prevent financial market difficulties from further impacting businesses and families across the country.”
Pipeline: Homebuyer Angst
American Banker (10/09/08) P. 11; Colter, Allison Bisbey
A new poll from Trulia Inc., which runs a property search engine, suggests that the prospect of federal intervention in the housing and credit markets is not encouraging potential home buyers. The online survey of more than 1,500 adults, conducted by Harris Interactive, found that more than 70 percent of non-homeowners do not plan to cross over to ownership in the next year. Among persons aged 18 to 34--considered the prime ages for home purchases--44 percent cited cost as the reason they do not own a home right now, while 41 percent of those aged 35 to 44 said they are being deterred by concerns over qualifying for financing. Of the poll participants who already own a home, however, nearly half expressed confidence in their property as a long-term investment.
A new poll from Trulia Inc., which runs a property search engine, suggests that the prospect of federal intervention in the housing and credit markets is not encouraging potential home buyers. The online survey of more than 1,500 adults, conducted by Harris Interactive, found that more than 70 percent of non-homeowners do not plan to cross over to ownership in the next year. Among persons aged 18 to 34--considered the prime ages for home purchases--44 percent cited cost as the reason they do not own a home right now, while 41 percent of those aged 35 to 44 said they are being deterred by concerns over qualifying for financing. Of the poll participants who already own a home, however, nearly half expressed confidence in their property as a long-term investment.
California's Prop. 12 Would Provide Mortgage Funds for Veterans
Los Angeles Times (10/09/08); McGreevy, Patrick
On the November ballot, California voters will be asked to borrow $900 million to extend discounted mortgages for those who served in the armed forces. The proposition, which would allow about 3,600 veterans to purchase affordable housing, was put on the ballot by unanimous votes of the state Assembly and Senate and a signature from Gov. Arnold Schwarzenegger. Nearly $102 million remains from previous bonds--proceeds from which are tapped by the CalVet program to buy mobile homes, houses and farms that are resold to veterans--but demand for those funds is projected to increase as the war in Iraq winds down. A key selling point is that the new bonds are to be repaid by the veterans via their monthly mortgage payments.
On the November ballot, California voters will be asked to borrow $900 million to extend discounted mortgages for those who served in the armed forces. The proposition, which would allow about 3,600 veterans to purchase affordable housing, was put on the ballot by unanimous votes of the state Assembly and Senate and a signature from Gov. Arnold Schwarzenegger. Nearly $102 million remains from previous bonds--proceeds from which are tapped by the CalVet program to buy mobile homes, houses and farms that are resold to veterans--but demand for those funds is projected to increase as the war in Iraq winds down. A key selling point is that the new bonds are to be repaid by the veterans via their monthly mortgage payments.
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