Helping heroes through mortgage mess

By Julia LeDoux/News & Messenger
Published: March 07, 2011

WOODBRIDGE, Va. - Moving every few years is a familiar part of life for active duty service members and their families.

But selling their homes after they are permanently reassigned to a new duty station has become even more challenging in today’s slumping housing market.

Congressman Gerry Connolly, D-11 VA, has introduced H.R. 237, a bill that would expand the eligibility period for the Homeowners Assistance Program (HAP) so that more service members whose homes have lost value due to the mortgage crisis will not face severe financial ramifications when they must sell because they have to move.

“Many service members who are reassigned and must sell their current homes discover that their homes are worth less than their mortgages and they face a financial nightmare,” said Connolly. “It is not fair to require military personnel or their families to uproot, move to a new base, and incur a loss of tens of thousands, if not hundreds of thousands, of dollars because the mortgage crisis depressed their home’s value.”

Current law mandates that homes had to be purchased by July 1, 2006 to be eligible for the program. Many believe that date is too restrictive because the full extent of the mortgage crisis was apparent until some months later. Connolly’s bill would give the Department of Defense the ability to change the eligibility dates for a specific military base or installation when circumstances require.

The bill was introduced after Connolly heard from two Prince William County constituents – Army Lt. Col. Christopher Meredith and Christine Adams, whose husband is a Marine pilot.

Meredith, his wife and their two sons moved from Woodbridge to Tampa, Fla., last spring after he was reassigned to the U.S. Special Operations Command. They rented out their home here, but the renter moved out after only a few months. In the meantime, the Merediths opted to buy a home in Florida because it was cheaper than renting. Currently, they are paying about $2,800 a month on the interest-only mortgage in Woodbridge, homeowners association dues, and the mortgage on their Florida home.

“Those of us left out of the HAP probably also do not have equity and therefore have a bank that wants nothing to do with us when attempting to refinance for lower interest, and fixed conventional,” said Meredith. “Most military maintained punctual payments, so therefore did not qualify for other programs either.”

Meredith said that if he had purchased his Woodbridge house 10 months sooner than he did he would be eligible for HAP.

“Essentially I believe it accurate to describe us as between a rock and a hard place with no end in sight,” he said.

Meredith flatly said he would never consider foreclosure as a way to get out of meeting his obligations. Instead, he and his wife have taken other measures to ensure they can continue to pay the bills.

“We have forfeited our retirement investments until further notice,” he said.

They’ve also approached Bank of America, which holds the mortgage on their home here in an unsuccessful bid to refinance their interest-only loan into a conventional one.

“Lt. Col. Christopher Meredith was declined for the refinance and modification programs through Treasury because he does not live in the home,” said Bank of America spokeswoman Jumana Bauwens. “The programs require that the properties be owner occupied.  We recently formed a dedicated team for our military customers within our mortgage servicing unit.  Lt. Col. Christopher Meredith’s file is with that team to help identify an alternative modification solution.  We recently announced that we are looking at ways to go above and beyond existing government programs to ensure we have the right mix of solutions that address the unique needs of our active military customers and the continued challenges in the housing market.” 

Adams said her husband will soon move to North Carolina by himself while she and the couple’s daughter remain in Montclair because the housing crisis has left them with an upside mortgage. Like Meredith, the Adams’ purchased their home too late to be eligible for HAP.

“My husband was gone for three nine-month deployments back to back over the three years prior to us moving here,” she said. “He has been deployed over half of my 10-year-old daughter’s life. Although we are strong and we know we can get through anything, we don’t feel right about this separation. It is not right. It is not fair. This is not a deployment. This is a forced separation breaking our family apart because of an arbitrary date carrying horrendous unintentional consequences breaking and bankrupting military families across the nation.”

Adams, who is originally from Connecticut, said Connecticut Rep. Chris Murphy has also signed on to support Connolly’s bill.

 “I am also currently working hand-in-hand with Prince William County Supervisor Maureen Caddigan’s office to encourage Virginia District 1 Rep. Wittman to do the same,” said Adams. “I cannot express how much the local support, especially that of Supervisor Caddigan’s office, has meant to me.”

Rep. Bob Filner of California has also announced support for the bill, as has the Military Officers Association of America, the Air Force Sergeants Association, and the National Military Family Association.

“We encourage all military families to contact the military legislative assistant in their representatives office to get their support in the form of co-sponsorship,” she added. “Effected families should also contact everyone they know and have them call their own U.S. representative on behalf of all military families.”

http://www2.insidenova.com/news/2011/mar/07/helping-heroes-through-mortgage-mess-ar-888951/