Mortgage crisis poses extra problems for military personnel

November 12, 2008

A guest post from Constantine von Hoffman, veteran business journalist and author of the blog CollateralDamage.biz, a humorous look at marketing, business and his dog.

On this Veterans Day 2008, there are 23.4 million military veterans alive in America. Of those, The U.S. Department of Veterans Affairs estimates that on a typical night about 154,000 of them are homeless. About 2,000 of those are people who served in Afghanistan and Iraq.

While this is a long-term problem, it will get worse as vets return from the current conflagrations to an economy that’s figuring out how far down “the pits” are. Vets face a unique set of challenges when they come home. In the best case scenario they are merely adjusting to a life without a constant threat to their lives and safety. That is really no small thing.

If you are in the National Guard or the Reserves, that best-case scenario also involves going back into the work force after a year or more away and at a time when most companies are laying people off. These problems are only compounded if you are self-employed or run your own business. In addition to that, most in the Guard and Reserves have been receiving substantially lower wages while they were on active duty and have had to spend out of whatever savings they’ve had to support their families.

And, like I said, that’s the best case scenario. In addition to any physical wounds, a huge number of vets have to contend with mental health issues – from post-traumatic stress disorder to addiction to sadly much more. All of which were acquired on behalf of us.

Whether or not you supported the George Bush Desert Classic (full disclosure: I was against it from before the start and I have a brother in the Reserves who’s already done a year in Iraq), the truth is we owe all of these soldiers, sailors, marines and airmen. Maybe you wish we only had to send troops to “good wars,” as we now call World War II. The fault for whether or not to fight in this war lies not with the troops but with the generals, our leaders and the people who elect them – i.e., you and me. So we owe these people who did what we corporately decided needed to be done.

There has been plenty of press coverage (but still not enough) about the failings in the Vets medical-care system. While some steps have been taken to address their fiscal issues as well, more needs to be done

The VA has long provided support for vets to get mortgages.

From 1944, when VA began helping veterans purchase homes under the original GI Bill, through December 2007, more than 18.4 million VA home loan guaranties have been issued, with a total value of $967 billion. VA ended fiscal year 2008 with almost 2.1 million active home loans, reflecting amortized loans totaling $220.8 billion. In fiscal year 2007, VA guaranteed 179,000 loans valued at $36.1 billion. During fiscal year 2008, VA’s programs for specially adapted housing helped 550 disabled veterans with grants totaling more than $24.6 million.

While the VA has never guaranteed subprime mortgages, wnder the Veterans’ Benefits Improvement Act of 2008, the department is providing more help to veterans who currently have subprime loans.

That is a start. We must increase aid and support to the families of veterans and that support must continue once the deployment is over. The truth is if we want to truly help with financial issues we must also address the health-care issues as well. It is unfair to expect someone to deal with their fiscal health when they are already have physical and mental-health problems as well.

BTW, U.S. Vets has a great website that is loaded with ways for vets and their families to get help.