US military homeowners are finding themselves in quite a predicament regarding their real estate investments these days; despite their homes being worth less than what they stumped up for them, they are being forced to move by the government, leaving them with big financial losses.
Take the Nellis Air Force Base in Las Vegas for instance – here, about 14% of military personnel own homes that are valued less than what they bought them for. Many of these people are receiving relocation orders, forcing them to sell up despite not being able to get a break-even price for their homes.
“We’ve heard of dozens of cases of service men and women who are underwater with their homes, and they don’t know what to do,” said Katie Savant of the National Military Family Association.
“Hundreds of military families are being ordered to relocate but they cannot afford to sell their homes.”
While members of the military appreciate that moving is all part and parcel of the job, none of them could have foreseen such huge drops in property values. And it gets worse, as walking away or defaulting on payments simply isn’t an option – having a foreclosure against your name can result in your security clearance being taken away.
However, the Department of Defense and Congress says it is trying to assist military families caught in this situation. As of 2009, military personnel who are ordered to move can receive help from a mortgage assistance program. But the only problem with this is that the program has been overwhelmed with requests for help, and is expected to post a budget deficit of $400 million at the end of 2011.
Even worse, not all military members are eligible. Currently, the program is only available to those who bought their homes pre-June 2006 and were ordered to relocate during the period between 2006 and 2010, meaning many servicemen are literally forced to accept a huge financial loss.