Thursday, July 8, 2010
What provided pensions and government loans to help veterans start businesses and buy homes or farms?
The G. I. Bill, which I think was actually named The Soldier's and Sailor's Relief Act, which was passed into law near the end of WW2. What it did was guarantee certain things to a veteran. For example, a portion (ALL, in some cases) of a mortgage was guaranteed against default which allowed a veteran to buy a house with a reduced or NO down payment. It guaranteed to pay for 4 years of higher education. It guaranteed that if they were drafted and left a job for the service, they would get their job back. If they had a existing mortgage and because of service could not pay then the banks could not foreclose. THIS last one, not being foreclosed on, was the really BIG item and was the main reason WHY this legislation was passed. Men were drafted into service and their pay was vastly reduced and families were put out of their houses as a result. As you can imagine, this outraged the general public once they found out about it. How dare the banks take the home from a soldier serving in a time of war! The public outrage is where the original legislation came from. In essence, the GI Bill rewarded a veteran for service in compensation for what he could NOT get from the public sector while serving, and had he remained in the public sector WOULD have been able to acquire. Over the years, the GI Bill has changed, but it has NOT kept up with the times and veterans of today receive much less than veterans of past years, but still, they DO receive SOME compensation in the form of benefits. The mortgage guarantee is one of the biggest. Only PART of the mortgage is guaranteed against default, but that is enough that a lender will generally fold the down payment into the loan so you can buy a house with no down payment. It is what I did, going on 20 years ago...
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