VA Loan Updates

Question: I am a veteran that receives the G.I. bill every month while in college. I am wondering if the total amount of G.I. bill for the year needs to be disclosed for tuition if I use my G.I. bill for living expenses and not tuition because i am getting loans to cover that.

Answer: Financial aid is determined based on all income both taxable and non-taxable. Therefore, yes you will need to report the amounts received because of the G.I. bill for financial aid.

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Many citizen soldiers serving in guard and reserve units, as well as recently discharged veterans, are missing out on valuable educational benefits either because they don’t know they are available or don’t realize they have a limited time to take advantage of them.

“As few as 10 percent of veterans who are entitled to education benefits are actually using them,” said Michael Caress, veterans benefits coordinator at Indiana State University. Caress bases his estimate on personal visits to guard and reserve units throughout Indiana. “It just kills me that so many people have these benefits available but don’t use them.”

Caress retired from the Indiana Air National Guard in 2006, after 38 years as a flight chief with the 181st Fighter Wing based at Terre Haute International Airport-Hulman Field.

During the Vietnam era, Caress financed his own bachelor’s degree at ISU and wants to do every thing he can to make sure today’s veterans take advantage of the educational benefits now available.

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The Senate agreed Friday to eliminate offsets in military retired and survivor payments, to spend more money on services for low-vision and blinded veterans, and to increase GI Bill education benefits in a series of votes to set budget priorities.

Senators also voted to make low-interest loans available to veterans and to extend until 2012 the option for mobilized National Guard and reserve members to use pre-tax retirement savings without penalty if they need the money for living expenses.

None of the votes is binding. They came as the Senate amended and passed its version of the 2008 concurrent budget resolution, which sets spending and revenue goals to be followed as Congress approves specific agency budgets and tax-related legislation. For lawmakers pushing for benefits increases, such as the GI Bill improvements proposed by Sen. Jim Webb, D-Va., it helps if the budget resolution sets aside money for their plan, but a mention in the budget resolution does not guarantee passage.

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Two state adjutants general told a House subcommittee they support substantial improvements to National Guard and reserve GI Bill benefits even though the Bush administration and Defense Department do not.

In testimony before the economic opportunity subcommittee of the House Veterans’ Affairs Committee, Arkansas Adjutant General Maj. Gen. William Wofford said education benefits are the primary reason people enlist in the Arkansas National Guard. The benefits are “an integral part of our efforts to maintain a viable force to meet mission requirements,” he said.

Current rules for using benefits seem unfair, Wofford said. “Our active-component counterparts are able to continue their GI Bill benefits after they are discharged from active service. Guard and Reserve members are only able to utilize GI Bill benefits while an active member of the Guard or reserve,” he said. “Regardless of the number of years of service and regardless of the number of times a Guard or reserve member has been placed in harm’s way in service to their country, they are not eligible for GI Bill benefits following their discharge.

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WASHINGTON — The state’s citizen soldiers are prepared, if not apprehensive, for the possibility of another deployment to Iraq, the new adjutant general of the Arkansas National Guard said Thursday.

And for their service, they should at least have educational benefits comparable to their active duty colleagues, Maj. Gen. William Wofford told a congressional committee.

Wofford, who officially took command a week ago, said he does not know when or if the 39th Infantry Brigade will be activated for its second tour to the Middle East.

That has caused at least some worry in the state, where already 85 percent of Guard troops have been activated since Sept. 11, 2001.

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Media has given a lot of attention to one aspect of real estate that nobody likes to talk about: foreclosure.

Loosing your job, unexpected medical expenses, and other life-altering occurrences can cause you to fall behind in your home mortgage payments. If you stop paying your home loan the lender can foreclose, taking ownership of your home.

OK, you are facing a financial crisis what do you do to keep your home?
You must do two things: First, don’t panic; second, put your pride on hold. The truth is that lenders do not want to foreclose, and will usually work with you to get you back on track.

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Homeownership is part of the American dream and key to building wealth among all Americans. Over the past decade, increasing homeownership has helped more African Americans secure a larger sliver of the American pie paved the way for the building of larger nest eggs for the future.

Just a few years ago, black homeownership hit historic highs: nearly half or 49.1 percent of African Americans in 2004 owned their own homes. Since then, rising foreclosure rates have threatened that progress, with homeownership slipping down to 47.9 percent in 2006.

The slippage has set off alarms for us at the National Urban League that there is a homeownership state of emergency afoot. If something isn’t done soon, the problem will only get worse, especially for the least experienced consumers in the market.

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The Mortgage Bankers Association’s release yesterday of its National Delinquency Survey showing a significant rise in delinquencies and foreclosures in the fourth quarter of 2006 spooked trading exchanges and raised concern from Wall Street to Capitol Hill about the potential for a broader financial crisis.

The MBA’s report showed that delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 4.95 percent of all loans outstanding in the fourth quarter of 2006 on a seasonally adjusted (SA) basis, up 28 basis points from the third quarter, and up 25 basis points from one year ago.

Increases in delinquencies were seen for all major loan types, but most notably for subprime and FHA loans. Delinquency rates for prime, subprime, FHA, and VA loans increased on a seasonally adjusted basis relative to the third quarter. The delinquency rate for FHA loans reached a new record in the fourth quarter.

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Default rates for subprime adjustable rate mortgages reached 14.44% in the fourth quarter of last year, jumping 122 basis points in three months. The default rate rose 77 basis points for all subprime loans, up from 12.56 percent in the third quarter to 13.33 percent - the highest since 2002.

During the quarter, the US Mortgage Bankers Association, said foreclosures were initiated on a seasonally adjusted 0.54% of all loans — the highest rate since the group started reporting the numbers 37 years ago.

Subprime-loan originations totaled about $605 billion in 2006, or about a fifth of the overall market for US home loans, according to trade publication Inside Mortgage Finance and the second-biggest subprime lender New Century was delisted from the New York Stock Exchange today - US home loan lenders bailing out of no-deposit loans; Big subprime lender teeters on brink of collapse .

The default rate for mortgage loans on one-to-four-unit residential properties stood at 4.95 percent of all loans outstanding in the fourth quarter of 2006 on a seasonally adjusted (SA) basis, up 28 basis points from the third quarter, and up 25 basis points from one year ago, according to MBA’s National Delinquency Survey. Default rates for subprime adjustable rate mortgages reached 14.44% in the fourth quarter of last year, jumping 122 basis points in three months.

The increase was driven by increases in delinquencies for all major loan types, most notably for subprime or high risk loans for individuals with imperfect credit records and FHA (Federal housing Agency) loans. Default rates for prime, subprime, FHA, and VA (Veteran Affairs) loans increased on a seasonally adjusted basis relative to the third quarter.  The default rate for FHA loans reached a new record in the fourth quarter.

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The federal government has programs set up to assist homebuyers purchase houses. These programs are set up by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), the Veterans Administration (VA), and the Rural Housing Service (RHS), which is a branch of the U.S. Department of Agriculture (USDA).

FHA does not make the loans but they do guarantee the loans for qualified houses and buyers. Homes need to meet certain criteria before FHA approves the loan guarantee. Some buyers find it hard to buy a home using conventional lending programs because of their income or their down payment.

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