Foreclosures in Military Towns Surge at Four Times U.S. Rate

**Silverbird** · 05-27-2008, 04:47 PM

May 27 (Bloomberg) -- U.S. Air Force Technical Sergeant Jeffrey VerSteegh, who repairs F-16 jets for the 132nd Fighter Wing, departed Des Moines, Iowa, in April for his third tour in Iraq. The father of four may lose his home when he returns.

The four-bedroom farmhouse he and his wife, Kathleen, own near the Iowa State Fairgrounds went into default in December after their monthly mortgage costs doubled to $1,100. Kathleen missed work because of breast cancer and they struggled to keep up the house payment, falling behind on other bills. Their bankruptcy was approved by the court a week after VerSteegh left for Iraq.

In the midst of the worst surge in mortgage defaults in seven decades, foreclosures in U.S. towns where soldiers live are increasing at a pace almost four times the national average, according to data compiled by research firm RealtyTrac Inc. in Irvine, California. As military families like the VerSteeghs signed up for the initial lower rates and easier terms of subprime mortgages, the number of people taking out Veterans Administration loans fell to the lowest in at least 12 years.

``We've never faced a situation like this, not in the Vietnam War, World War II, or the Korean War, where so many military are in danger of losing their homes,'' said Paul Sullivan, executive director of Veterans for Common Sense, a Washington-based advocacy group started in 2002 by Iraq and Afghanistan War veterans. ``No one asked them for their credit score when we asked them to fight for us.''

Military Foreclosures
Foreclosure filings in 10 towns and cities within 10 miles of military facilities, including Norfolk, Virginia, home of the Navy's largest base, rose by an average 217 percent from January through April from a year earlier. Nationally, the rate was 59 percent in the same period, according to RealtyTrac, which tallies bank seizures, auctions and default notices....
.http://www.bloomberg.com/apps/news?p...wsU&refer=home

**Asylum** · 05-27-2008, 08:59 PM

not seeing it's exactly 'news' that military members aren't the brightest when it comes to money... there are plenty of used car sales lots right out the front gate which have been doing the same for years..

instead of all the stupid 'human trafficking' training that's required, an annual basic financial class would be far more beneficial

**Silverbird** · 05-27-2008, 09:10 PM

Originally Posted by Asylum

not seeing it's exactly 'news' that military members aren't the brightest when it comes to money... there are plenty of used car sales lots right out the front gate which have been doing the same for years..

instead of all the stupid 'human trafficking' training that's required, an annual basic financial class would be far more beneficial

I think the problem is they were a corraled audience - probably the house loan people were handing out flyers near the used car sales lots. Sure we love our armed forces - especially their money.

**pyriel** · 05-28-2008, 02:10 PM

A tech sergeant in the AF is an E-5. A mortgage with 1,100 monthly payment should have been covered by BAH when he was deployed. The calculation formula for BAH is amount of loan divided by 120 which will put his mortgage loan to 132,000. Well below the maximum level that an E-5 is entitled for in accordance to his rank. Additionally, $620 is added to supplement his utilities. The bottom line is the military reimburses military members and actually pays for their housing mortgage.

What the article didn't specify is that the military member may be living beyond his means. The article is misleading in a sense that military members are losing their homes due to increase in mortgage cost due to subprime expiration which basically reverting to adjustable rate mortgage (ARM). I wonder what is their living standard? Credit card consumptions? etc. etc.

For those who visit this site, you are lucky to see what proper planning can do for you and ensuring that living within your means becomes one of your tenets in ensuring that you will have a good retirement life. Please always be careful and learn from another...

Pyriel

**Fivetears** · 05-28-2008, 03:35 PM

E-6; E-5 is Staff in the USAF.

Originally Posted by pyriel

A tech sergeant in the AF is an E-5.

**Asylum** · 05-28-2008, 03:42 PM

Thoughful analysis:

http://market-ticker.denninger.net/

Furthermore, what is this subprime over representation among people in the service? There is already a program for servicemen and women to buy homes, its called "VA", and it features zero down payment provisions, no mortgage insurance requirements and no piggybacks or games such as prepayment penalties. Furthermore, most VA loans are assumable, which means that when you go to sell your house, provided the buyer meets eligibility requirements they can assume your mortgage instead of getting a new one! This is a MAJOR feature in that virtually NO ordinary mortgages can be assumed.

This is the program that veterans and active duty service folks should be using!