Would Have Been Hoisted from Comments Elsewhere
But Steve Randy Waldman already did the heavy lifting:
several of the other officers had been stationed at the height of the housing bubble at facilities located near D.C. in Northern Virginia. They lived in very modest homes which were removed from their workplaces by substantial driving distances, but these homes were nevertheless particularly pricey for someone with a family and on a military salary. The humble homes ate significant chunks out of those salaries as the commutes did to the (already scarce) time these men had to spend with their families….
While we were away, about halfway through our deployment, the crash began and something mysterious had gone horribly wrong with the machinery of America. The small equity positions these men has invested in their respective residences were wiped out in a matter of months. By the time they were close to returning to these homes the men were all badly underwater by over one hundred thousand dollars and, what was worse, the Army had reassigned them….
Their instinct was that if they had borrowed money from a friend or a neighbor they would feel a deep, almost sacred, obligation to make good on their debt and pay it off in full plus interest as soon as they could manage it….That was, after all, the “right thing to do” as they had been taught by their parents and grandparents.
But then the bailouts with taxpayer money started. The “too big to fail” talk began, and then the wave of foreclosures and layoffs and emerging scandals of the unjust excesses of the financial industry, and so on. And these men began to feel that from the personal scale of their little world, their family was also perhaps “too big to fail” by the forfeit of their hard-won life’s savings.
They also started to question how the bailouts could make sense without some of the benefits flowing to innocent and responsible men such as themselves….
Note:I mentioned this near the end of my last post, but it really deserves to be seen and read by more than the six people who might read to the end of that one.
It is my understanding that the military budget contains funds to compensatate military personell caught in this situation.
My understanding is based on hearsay, so do not quote me as an authority.
But if this is true most of the referenced article is just incorrect speculation by someone who has no idea what they are talking about.
Yep, spencer and MG are right. This story just doesn’t wash. Soldiers get fairly generous housing allowances….and staying on base is pretty nice if you can get it. The quarters at Ft Belvoir are very nice and housing is expanding at Belvoir. And if you’re deployed, you’re exempt from income taxes plus other income adjustments. So there’s something kind of fishy about this story. I’m not saying that it isn’t possible for some officers to make some stupid decisions and get in over their heads, but those are individual problems and I don’t think you can hang them on the military. There are plenty of other things you could hang on the military, but this just isn’t one of them.
The Department of Defense (DOD) offers the Homeowners Assistance Program (HAP). I expect that this is the program that caught Spencer’s attention.
DoD Homeowners Assistance Program (HAP)
http://hap.usace.army.mil/homepage.html
“The American Recovery and Reinvestment Act of 2009 (ARRA) temporarily expands the HAP to assist service members and DOD employees who are wounded, injured or become ill when deployed, surviving spouses of service members or DOD employees killed or died of wounds while deployed, service member and civilian employees assigned to BRAC 05 organizations, and service members required to permanently relocate during the home mortgage crisis.”
Benefits
Private Sale – Eligible applicants may be compensated for the difference between 95% of the appraised fair market value of the property prior to the announcement date, and the appraised value of the property at the time of sale, or the sales price, whichever is greater. Closing costs are reimbursed for private sales.
Government Purchase – An eligible applicant may elect to sell the property to the government and receive, as the purchase price, an amount not to exceed 75% of the appraised fair market value prior to the date of the announcement, or the current total amount of outstanding mortgages, whichever is greater.
Foreclosure Assistance – If foreclosure proceedings have commenced, an applicant may elect to receive foreclosure benefits or private sale benefits. Foreclosure benefits may be paid directly to the applicant to reimburse for foreclosure costs paid by the applicant, or paid to third parties on the applicant’s behalf.
How HAP assists you – HAP provides assistance in four ways. For eligible applicants, the Government may:
1.Reimburse you for part of your loss from selling your home.
2.Assist you, if you don’t have funds from the sale of your home to pay-off your mortgage.
3.Purchase your home by paying off the mortgage.
4.Help, if you default on your mortgage.
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AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (ARRA) EXPANSION OF HAP
MAXIMUM ELIGIBLE HOME PURCHASE PRICES
By State and County listing
http://hap.usace.army.mil/Documents/ARRA_HAP_Home_Purchase_Price_Limits_26-Jun-09.pdf
.
DoD Announces $555 Million Expansion To Homeowners Assistance Program (HAP)
May 14, 2009
http://www.defense.gov/releases/release.aspx?releaseid=12677
“The Department of Defense (DoD) today announced details for the temporary expansion of the Homeowners Assistance Program (HAP) using funds from the American Recovery and Reinvestment Act (ARRA). The $555 million allocated to the HAP will be used to provide benefits to eligible military and DoD civilians who face financial losses selling their primary residence during the current housing downturn.”
“Last February, Congress authorized ARRA funding for a temporary expansion of the HAP in order to address unique economic pressures faced by military personnel. After conducting an extensive analysis to determine how best to prioritize the finite $555 million available while maximizing assistance to as many people as possible, the DoD developed specific eligibility criteria that includes PCS retroactivity from July, 1, 2006, through December, 31, 2009, and longer for wounded warriors/surviving spouses and personnel affected by BRAC.”
“All active and former members of the Army, Navy, Marine Corps, Air Force, Coast Guard, as well as DoD civilians, who have sold a primary residence for a loss or are considering selling their home are encouraged to visit the HAP website in order to check specific program criteria, and if eligible, apply online.”
I have been associated with the ins and outs of servicemembers buying primary residences in an environment where they move every few years.
As noted, the housing allowances are pre tax, and the servicemember can use it to pay a mortgage, taxes and property insurance.
If the market is going up the member wins, if the market is going down, oh well that is why capital gains on real estate are excused if the house was owned and lived in for two years.
Whether the DoD “bails out” servicemembers holding the bag in these days is as interesting as buying more F-22 because some folks will get laid off.
The last time this happened was in the 90’s after the Reagan Friedman monetarist bubble burst.
I do not recall if the DoD helped the unfortunate then.
I am convinced the US needs a draft and far fewer professional military persons whom are looking to build lucrative careers making up warfare to make their own way.
5% of GDP is far too much, and creates an animous to keep it growing not based on reason..