Banks Foreclosing on Active Military Members—Part 1

by Amy Ransdell ~ Short Sale Daily News

Just when you thought you had heard it all in terms of foreclosure horror stories, we have a new area of the American population being affected. Active members of the military—and often those personnel stationed overseas fighting our many battles.

Foreclosures in cities near active military bases are increasing at a rates of nearly four times the national average, according to RealtyTrac data. In Columbia, South Carolina, for example, where the Army trains members specifically for combat in

Iraq and Afhganistan, properties in some part of the foreclosure process skyrocketed 492 % from the previous year.

The stats are nearly as bad in Norfolk, Virginia, location of the Navy’s largest base. Here, the increase is 217 % over a year ago.

Unfortunately, current law makes it difficult for those currently in military service or even veterans to refinance higher cost mortgages into VA-guaranteed notes. So basically, you can risk your life for your country, we just can’t seem to have adequate or fair laws in place to guarantee your family will have a place to call home while you’re stationed thousands of miles away.

“Conveniently,” neither the Department of Veterans Affairs nor the Pentagon track the number of military families dealing with foreclosure. That way, you don’t have to fix something you don’t even know is broken.

For those military members with VA loans, there are at least a few protections in place. However, with the onslaught of subprime mortgages during the Bush administration, military personnel were able to get lower initial rates and easier terms and qualifications than if they had gone the VA loan route. Consequently, the number of people taking out VA loans has, in recent years, dropped to its lowest rate in 12 years.

Stay tuned in Part 2 when we talk about some of the proposed legislation in Washington to help stem this disgraceful practice of foreclosing on active military members and how real estate agents can take action on this as well.

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