Mortgage crisis hits home for troops, vets

[CommunityEditor]

Air Force veteran Nellie Cooper thought she was following good advice when she refinanced her home’s mortgage with an adjustable-rate loan. For the self-employed real estate agent, it seemed smart.

But her mortgage payments ballooned while local property values dropped, sinking her prospects of refinancing into a more secure, fixed-rate loan. With lenders nationwide tightening eligibility rules, Cooper is finding few that are willing to refinance or rework the loan into something financially manageable for her.

Cooper, who lives in Oceanside, Calif., found no help from the Department of Veterans Affairs: Except in very rare cases, VA does not refinance mortgages it didn’t sell. She didn’t buy the house through VA because she was told repeatedly she didn’t qualify and the paperwork was “too cumbersome.”

Filner, who chairs the House Veterans’ Affairs Committee, planned the field hearing on the sub-prime market and its effects on veterans.

After several years of an expanding housing market and soaring prices, service members and veterans are among tens of thousands of homeowners facing financial ruin in today’s housing market. Homeowners see their initial low interest rates resetting at higher rates, sometimes doubling their monthly mortgage payment. But the lending industry that sold them those loans with so-called “creative financing” has largely abandoned them, and the industry’s recent belt-tightening has left many unable to refinance into more affordable payments.

Young heads the City-County Reinvestment Task Force, which recently urged local officials to lobby for tighter laws to prevent predatory lending, expand housing counseling, establish a local bank to buy foreclosed properties and press for broader lending authority by VA and the Federal Housing Administration.

He blames the default rate on thousands of sub-prime loans dumped on the market, as many as 70 percent sold by unlicensed, unscrupulous lenders who have since skipped the industry.

Young, who represents the Chula Vista area, home to a large number of Navy families and military veterans, said “it troubles me” that many victims of predatory lenders are military, with many troops who deploy to Iraq or Afghanistan returning to find their homes have lost value or that they face larger mortgage payments each month.

She and other counselors are hearing more concerns from military officers who worry about losing security clearances if they fall behind on their mortgages and are forced to foreclose. “One of the first questions they tell me is: Are you going to tell my commanding officer?” she said.

Recent changes to military security regulations mean that financial troubles and bad credit will cause more service members to lose their clearances and, with it, assignments and promotions.

“I would like to see a moratorium” on such reporting, Beard said. “Our military should not be dealing with the fear of reprisals ... for being caught up in a bad loan.”

The public forum generated several ideas from speakers and audience members, which Filner promised to look into when he returns to Washington:

• Increase the maximum VA and FHA loan limits — $417,000 and $362,790, respectively

• Give VA broader authority to refinance non-VA mortgages, which would offer relief for many veterans. “We’d need to change the law to raise the guaranty,” said VA’s Judith Caden.

• Cooper suggested having a third party “oversee the exact terms of the loan and explain to them in simple terms” to the homebuyer.

VA could serve in that role “if it’s given the authority,” Filner said.


Article: http://www.militarytimes.com/news/20...prime_071129w/

I'm sorry to be so unsympathetic but people like Cooper are crying foul when they are the ones that got themselves into these contracts and gambling that there are no downsides. She is a real estate agent???!!! She wanted the VA to bail her out and it was not even a VA loan??? The woman has a lot of gall and makes me ashamed that she calls herself a veteran. I call her naive. MSgt Bill Stengle (USAF, Ret)

[bomber1379]

Originally Posted by loystengle

I'm sorry to be so unsympathetic but people like Cooper are crying foul when they are the ones that got themselves into these contracts and gambling that there are no downsides. She is a real estate agent???!!! She wanted the VA to bail her out and it was not even a VA loan??? The woman has a lot of gall and makes me ashamed that she calls herself a veteran. I call her naive. MSgt Bill Stengle (USAF, Ret)

That's pretty harsh man. These loans are a scam that prey on low income families and a lot of people got screwed. They were lied to, and now the companies that gave them these loans are skipping town leaving them high and dry. It's a crime and you should be above knocking on other veterans! This individual did their time, same as you and deserves respect. Instead of knocking her and calling her stupid why don't you put that energy to good use and try to help her out. She is a fellow veteran after all and we have to stick together.

[bomber1379]

It would probably be a big help if veterans were able to recieve some type of aid through the VA in this situation to prevent these patriots from losing everything. If only we weren't wasting so much moolah in Iraq and the rest of the world. We could do a lot of good here.

[The Universal Curmudgeon_guest]

Originally Posted by bomber1379

That's pretty harsh man.... It's a crime and you should be above knocking on other veterans! This individual did their time, same as you and deserves respect. Instead of knocking her and calling her stupid why don't you put that energy to good use and try to help her out. She is a fellow veteran after all and we have to stick together.

Would your opinion be the same if all of the facts - EXCEPT for her military service have been the same?

[bomber1379]

Originally Posted by The Universal Curmudgeon_guest

Would your opinion be the same if all of the facts - EXCEPT for her military service have been the same?

Yes, I think it is very wrong what is happening to all of these families that fell prey to these lenders. They are all victims of greedy and sneaky individuals in my eyes. I also feel very strongly that money wasted abroad flexing our muscles would be put to a lot better use here, in situations such as this.

[Shrike]

Originally Posted by bomber1379

Yes, I think it is very wrong what is happening to all of these families that fell prey to these lenders. They are all victims of greedy and sneaky individuals in my eyes. I also feel very strongly that money wasted abroad flexing our muscles would be put to a lot better use here, in situations such as this.

Caveat emptor.

[bomber1379]

Originally Posted by Shrike

Caveat emptor.

Yeah, but the that still doesn't make it fair what's going on. But I agree they should have been more aware.

[Shrike]

Originally Posted by bomber1379

Yeah, but the that still doesn't make it fair what's going on. But I agree they should have been more aware.

Any lenders who violated laws should be prosecuted as harshly as possible, IMNSHO.

But for the vast majority of lenders operating within the scope of the law, well, it's not their fault people took adjustable-rate loans without thoroughly investigating the pro's and con's. I can't fault people for trying to buy themselves a home for themselves and their families - home ownership is just a dream for many people. However, as with any purchase, the onus is on the buyer to know what they're getting into.

Do I find it sad that there are people who suddenly can't make their mortgage payments? Hell yeah I do, especially if they have children. But no one put a gun to their heads and made them take loans to buy, what is in many of the circumstances I've read about, much more home than they could otherwise afford.

Again, though: any lenders who skirted laws in the making of these loans need to be nailed.

[The Universal Curmudgeon_guest]

Originally Posted by bomber1379

Yes, I think it is very wrong what is happening to all of these families that fell prey to these lenders.

At least you have the virtue of consistancy.

Originally Posted by bomber1379

They are all victims of greedy and sneaky individuals in my eyes.

That may well be the case, however they don't appear to have fallen afoul of any illegal activity.

Remember, the lenders are NOT in business to "help people to buy homes" they are in business to make money and that is exactly what they thought that they were doing. If they hadn't thought that they would be able to make money out of those "sub-prime" mortages you can bet that they wouldn't have been making those loans.

Now that the borrowers are (effectively) hooped, the outcry for a bailout of those "poor unfortunate homeowners" is starting to swell. Of course, what that bailout actually amounts to is making sure that the lenders make the profits that they thought that they would - only now they are getting it even from those who were astute enough not to fall for the lender's blandishments. (HINT "astute enough not to fall for the lender's blandishments" means the same thing as "the American taxpayer".)

Originally Posted by bomber1379

I also feel very strongly that money wasted abroad flexing our muscles would be put to a lot better use here, in situations such as this.

Actually any money that the government spends (which isn't the same thing as "government money" since the government doesn't actually have any money - just what it can extract from the taxpayers) which is wasted - regardless of whether that falls under the general heading of "all waste domestic ..." or the general heading of "all waste ... and foreign" is wasted and could be put to much better use someplace else - even if that "better use" is to simply leave it in the taxpayers' pockets.