How does that work? Of course I suppose that it shouldn't suprise me, but it does. Huh!
I understand that military members got themselves into this mortgage mess (us included) by buying a house when prices were high. But I also know that there are many many members of the military that when they bought their house thought that they had at least 3 years left on station (like us), or that the market couldn't crash like it has (this was the only fear we had, we didn't think that BOTH could happen).
Why does the FBI/CIA get an advantage that the military doesn't? What makes them so much more special in cases like this?
Mortgage Crisis Hits Military Homefront
July 10, 2008
Military.com|by Bryant Jordan
The Marine Corps gunnery sergeant and his wife felt they'd found a little bit of paradise in the San Diego area in 2003 when they bought their $304,000 house and went to work transforming it into the home of their dreams.
A home office, new flooring, a patio, landscaping and more boosted the prized house's price a few years later to more than a half-million dollars.
That the 15-year-Marine - who works in supply administration -- could receive orders for a move didn't trouble them. They would just rent out the home they loved -- and, if absolutely necessary, they'd just sell and make a healthy profit.
But it didn't work out that way. Instead, the family - who preferred to remain anonymous -- is straddling the coasts as they try to set up a new residence in Virginia and at the same time escape the wreck of their much-devalued property in California without having to foreclose on the property and destroy their credit.
Anyone who's been paying attention knows that the bursting of the subprime mortgage industry shifted the tectonic plates of American real estate, throwing hundreds of thousands of homes, and their owners, into deep financial crevices.
But what many do not know is that home foreclosures are hitting military families at a greater rate than those in the civilian world - by a ratio of 4 to 1, according to some estimates.
Danielle Babb, a real estate and economics expert who teaches at the University of California, Irvine, bases that figure on foreclosure filings in 10 cities and towns within 10 miles of military bases across the country for the period January through April 2007.
In these military communities, she said, filings rose 217 percent, while the national average for the same period was 59 percent.
"This means we are seeing about four times the rate of foreclosure around military bases," she told Military.com in a June 1 email interview.
Among the top "surge areas" of foreclosures, she said, was Columbia, S.C. -- home to Fort Jackson -- where the rate rose 492 percent in the first quarter of 2007. And coming in second is Woodbridge, Va., near Marine Corps Base Quantico, where foreclosure filings there went up 414 percent.
And the collapse didn't stop there, Babb said. Foreclosures tripled in communities surrounding Norfolk Naval Base, Va., and Camp Pendleton, Calif., and more than doubled in Havelock, N.C., home to Marine Corps Air Station Cherry Point.
Babb suggests several reasons, including military salaries that haven't kept up with inflation, troops forced to move quickly, abandoning their pricey homes, and the crunch of adjustable rate mortgage (ARM) resets that the military homeowners could not meet.
Then, too, it appears service members were especially targeted for subprime loans, according to Rudi Williams of the National Veterans Foundation of Los Angeles. Williams, in an interview with Bloomberg News, said military families were considered prime customers for subprime lending because they move frequently, and many would have weak credit ratings because of their low pay.
That military members and families would be attracted to ARMs is nothing new since many expected to sell after two or three years -- before the interest rate could climb, Gladden said.
Making them even more attractive is the fact that VA mortgages carry special fees and higher settlement costs that push up purchase prices, said Joe Gladden, a retired Navy aviator now in the real estate business in Virginia, who's working with the Marine family and other military families caught in the subprime market meltdown. And in many cases, VA loan limits made buying in some especially high-cost areas prohibitive.
Not surprisingly, then, as home-sale prices spiraled upward through 2006, use of VA mortgages by service members declined as more took advantage of the subprime mortgage industry, according to Gladden.
The Marine wife now trying to offload her San Diego house says that what is "most disturbing throughout the process [of dealing with their crisis] is I felt there was no one who could help us. Our lender treated us as if we were going into foreclosure … as if we owed back payments or something.
"All the advice we heard was 'talk to your lender,' "she said, "and I'm trying to talk to the lender. They never take my phone calls, so I always leave a message, or [they] ask if I would like to speak to another person. And when I do talk to someone, it's always, 'it's not our problem. There's nothing we can do to help you until you're behind two months [in mortgage payments].' "
The PCS link
One of the things that made military buyers so attractive to subprime lenders also has played a big part in turning the service members' lives upside down: permanent change of station moves.
"Military families move every two to four years," said Gladden, who owns a company called "Veterans Realty Serving America's Military" and is a contributor to Military.com's finance page, and lots of military people ended up in the subprime market.
"A lot of people made that mistake," he said.
Service members often buy when they transfer to a new location in the U.S., he said. This means that all those service members who bought homes between two and three years ago, when housing costs were high, are now likely to transfer during a time when their homes won't fetch anything like what they paid for them, he said.
Nor is renting a viable option for many, since rents - themselves depressed as they compete with the availability of homes whose sale prices have plummeted - often won't cover the mortgage, according to Gladden.
For military families, then, there may be no choice but to sell at any price and try to pay off the balance due on the mortgage. Serious debt has career repercussions, including the loss of security clearances vital to the service member's job. That's because a service member with a great deal of debt is considered a greater security risk, says Gladden.
"In theory [they are] more subject to someone dangling money in front of them for information," he explained. "How DoD is going to get around that if thousands of people lose their security clearance, I don't know."
A 'home-buy' program
According to the Marine Corps, the service's legal assistance offices are not reporting any increases in requests for home foreclosure assistance.
"Nevertheless, we are certainly mindful of the financial risks and associated stress that individual Marines and their families face as a result of rising mortgage payments and falling home prices," said Corps spokesman Maj. David Nevers.
He said the Corps offiers seminars and individual counseling programs at 18 Marine installations through the Personal Financial Managment Program. Topics include housing hurdles, credit and debt management, avoiding debt traps, getting out of debt and buying and selling a home.
Corps legal assistance attorneys, he said, are trined in foreeclosure issues and can identify legal issues and help Marines and sailors decide their best course of action when faced with a foreclosure.
To Gladden, what could have helped military families in this jam is a government-backed home-buy program similar to one enjoyed by employees of the FBI, CIA and other federal agencies.
"We work a lot with [these agencies]," Gladden said. "The [employee] pays $12,000 to $15,000 in closing costs, and when they're ready to move, if they can't sell the house on their own, we'll take two appraisals, take the average of that, and a company [under contract to the agency] buys it for that amount."
Prudential Real Estate, for example, holds the contract for the FBI, he said.
The employee can still lose money on the deal, he said, "but they won't take a catastrophic loss."
Gladden and others proposed such a program for military members more than two years ago, targeted especially for career troops.
The problem is that "you can't get traction on it" politically, not even to study it, he said.
"First of all you've got to get the attention of guys like Ike Skelton and Duncan Hunter," he said, referring to the Democrat chairman of the House Armed Services Committee and the committee's ranking Republican member. "They need to get this, hear it and have their staffers evaluate it."
Service members, he said, should at least have the same kind of home-buy program the government gives to other federal employees. "They ought to get that 'silver bullet' that the FBI has. It only seems fair."
My question to you is why does the FBI get this help and the men and women that fight for our country do not?
Something needs to be done to help all of us that are struggling, due to the fact that our service comes first!
Write to those congress and senate members, the president, the candidates, and anyone else that you can think of! They need to hear from the public how this crisis is effecting everyone. I don't think that they are getting the message sitting up there in Washington DC. I don't think that they get how hard this mortgage mess is hitting the military community. For that matter I don't think that they know how hard it is hitting the general population.
I sent out about 20 emails today about this, I challenge you to do the same.
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