The nation has seen a tremendous jump in the number of foreclosures this year in our housing market, with some saying it is the worst we have seen in the past seven decades. The number of defaults on mortgage loans among those in the military community is 4 times that of the national average. At the same time military families are struggling to avoid foreclosure, the Veterans Administration (VA) loans for housing have fallen to their lowest point in the past 12 years. Many families took out low subprime mortgages rather than sticking with the Veterans Administration (VA) loans. Much of the fault lies with the lenders who allowed these subprime loans that they had no business putting through. Unknowingly people have ruined their credit when they were given loans that they were at high risk of not being able to meet the payments of.
Military families became prime targets of lenders for the subprime loans, as they move around a lot, frequently deploy overseas and have weak credit ratings because of this. So it comes as no surprise that the default rates are higher in those communities surrounding our bases. Interestingly enough, foreclosure rates among the military who have VA loans is only slightly higher than the rates for civilians in the prime borrowers’ field, those who have the highest credit scores. So far, the higher rates of foreclosure in the military community are only connected with the subprime loans. There is some indication that the trend may be spilling over to the VA loans here in the near future. Percentages of loans that are over 30 days and over 90 days past due in the VA loans are double the average in the prime borrowing field, but those percentages are still very low. In addition to the mortgage housing woes, many in the military are also experiencing problems staying current on car loans and credit card debt.
For our military, there are some safety factors to help protect them or at least buffer them during the hard times against possible default on mortgage’s which often later end up in bankruptcy. All active duty service members and reservists/National Guard members while on active duty have some protection under the Service Members Civil Relief Act. This will protect them during their deployment and from 30 up to 90 days after they return home. Some areas that might fall under this protection include mortgage payments, pending trials, outstanding credit card debt, taxes and terminations of lease.
The intention of this Relief Act is to keep the minds of our military focused on their work while deployed and to reduce the stress of the family members at home. In today’s military, with faster forms of communication occurring between the deployed and their families, morale becomes a major issue. It is stressful on both sides of the family, whether deployed or being back home and coping with all the paperwork and legalities involved, but our men and women shouldn’t be needing to concentrate on the home front in the middle of a war zone!
HOPE NOW is set up to help homeowners are willing to try and make a go of it, but need a temporary bit of help.
You should go see your Legal Assistance Attorney and bring along your deployment orders. Military service members and their family are entitled to free legal assistance. You should have access to a Legal Assistance offices are located at most all bases, installations and ships. If you are having trouble locating one, the following sites should help you to locate one in your area.
Installations & Directories of Services
Army
Navy/Marine Corps
Coast Guard
If a service member turns to the VA for a re-financing loan, the most they are allowed is $144,000 which is not much in today’s housing market.
The legislature has passed a house bill H.R. 5818 which has a provision in it, to lengthen the amount of time before foreclosures could occur and also includes government bailout provision. It seems unlikely though, that it will be made into law, as there is a fear by some that this could lead to more banks foreclosing knowing the government is there to bail them out.
It would seem the best course of action when you know you are looking at needing some kind of help, would be paying a visit to your Legal Assistance Attorney. Sit down with them, and find out what they can do to help you. Be prepared to lay it all out on the line with them financially. Perhaps you are in need of only a short-term boost. If so, don’t wait until your back is to the wall and foreclosure and/or bankruptcy is your only option. Be pro-active towards your credit, not reactive!
I have an article, “Groups that provide family assistance in an emergency" which is posted under Information FOR The Troops on 5/23/08. There are many groups here that will help in the short term. Again, there is some help out there, but you have to be PRO-active in seeking it out. They will not be coming to you first.
Copyright 2008 MsMarti. All rights reserved.
SGT WOTN's Addition: Soldiers needing immediate assistance should contact their Chain of Command which will point them in the right direction (accept the stern lecture - swallow your pride).
The Soldier and Sailor's Relief Act will do a lot, IF you implement it early, by reducing ALL of your credit interest rates (and hence your payments), as well as provide temporary protection from foreclosures. Don't let it get that far.
Additionally, there are many programs such as http://www.vfw.org/index.cfm?fa=cmty.leveld&did=3724 the VFW's Unmet needs program to help in the crunch which can occur during deployments.
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