By Kathleen M. Howley
May 27 (Bloomberg) -- U.S. Air Force Technical Sergeant Jeffrey VerSteegh, who repairs F-16 jets for the 132nd Fighter Wing, departed Des Moines, Iowa, in April for his third tour in Iraq.
The father of four may lose his home when he returns.
The father of four may lose his home when he returns.
The four-bedroom farmhouse he and his wife, Kathleen, own near the Iowa State Fairgrounds went into default in December after their monthly mortgage costs doubled to $1,100. Kathleen missed work because of breast cancer and they struggled to keep up the house payment, falling behind on other bills. Their bankruptcy was approved by the court a week after VerSteegh left for Iraq.
In the midst of the worst surge in mortgage defaults in seven decades, foreclosures in U.S. towns where soldiers live are increasing at a pace almost four times the national average, according to data compiled by research firm RealtyTrac Inc. in Irvine, California. As military families like the VerSteeghs signed up for the initial lower rates and easier terms of subprime mortgages, the number of people taking out Veterans Administration loans fell to the lowest in at least 12 years.
``We've never faced a situation like this, not in the Vietnam War, World War II, or the Korean War, where so many military are in danger of losing their homes,'' said Paul Sullivan, executive director of Veterans for Common Sense, a Washington-based advocacy group started in 2002 by Iraq and Afghanistan War veterans. ``No one asked them for their credit score when we asked them to fight for us.''
Military Foreclosures
Foreclosure filings in 10 towns and cities within 10 miles of military facilities, including Norfolk, Virginia, home of the Navy's largest base, rose by an average 217 percent from January through April from a year earlier. Nationally, the rate was 59 percent in the same period, according to RealtyTrac, which tallies bank seizures, auctions and default notices.
The biggest surge was in Columbia, South Carolina, home to Fort Jackson, where the Army trains recruits for combat in Afghanistan and Iraq. Properties in some stage of foreclosure rose 492 percent from a year earlier, RealtyTrac said. The second-biggest increase was 414 percent in Woodbridge, Virginia, next to the Marine Corps Base Quantico.
Foreclosure filings tripled in the cities surrounding Norfolk Naval Base and the Camp Pendleton Marine Corps Base near Oceanside, California, RealtyTrac said. Havelock, North Carolina, site of Marine Corps Air Station Cherry Point, saw foreclosures more than double.
Weak Credit
Military families were targeted as customers during the boom in subprime lending because their frequent moves, overseas stints, and low pay meant they were more likely to have weak credit ratings, said Rudi Williams of the National Veterans Foundation in Los Angeles. In 2006, at the peak of U.S. subprime lending, the number of VA loans fell to barely a third the level of two years earlier, according to VA data.
VA loans totaled 135,000 last year, its fourth consecutive annual decline.
An Army or Marine Corps sergeant with four years of experience makes $27,000 a year, plus combat pay of $225 a month, according to the 2008 Military Authorization Act, which increased basic pay rates 3.5 percent from a year ago.
Soldiers authorized to live off-base also receive a housing allowance that this year starts at about $500 a month, 7.3 percent higher than in 2007, paid even when they are deployed.
Counting the stipends, they still fall short of the 2007 median U.S. household income of $59,224 as measured by the National Association of Realtors in Chicago.
Legislative Effort
``Think about how much stress comes with a foreclosure, and then imagine you're walking the same tightrope while being employed in Baghdad,'' said Paul Rieckhoff, 33, the head of Iraq and Afghanistan Veterans of America and a former 1st lieutenant with the Army's 3rd Infantry Division.
The Servicemembers' Civil Relief Act protects soldiers and sailors from losing homes for nonpayment of mortgages only while on active duty and for 90 days after they return home.
Members of Congress, including Senator Johnny Isakson, a Georgia Republican, and Representative Bob Filner, a Democrat from California, are trying to extend that to a year, saying three months isn't enough.
Another flaw in the current law is it puts the burden on the soldiers, sailors or the families they left behind to come up with the paperwork and notify the bank, said Sullivan of the Washington Veterans' group. Unlike in other wars, members of the military often are able to telephone home or receive e-mails, creating a ``morale problem'' as they try to deal with foreclosure notices, he said.
VA Mortgages
``It's heartbreaking to see people struggling with a foreclosure while they or someone they love is in a war zone, or when they're trying to adjust after coming back from one,'' said Sullivan, a Cavalry Scout with the Army's 1st Armored Division during the 1991 Gulf War.
Lenders aren't required to keep records on the status of non-government loans to military members or veterans, said Mike Frueh, the VA's assistant director for loan management in Washington. Judging solely by data on VA mortgages, active military and veterans in the current housing slump are getting into trouble with their home loans at a pace only slightly above the civilian rate, he said.
The share of VA mortgages in foreclosure was 1.12 percent in the fourth quarter, compared with 0.96 percent for so-called prime borrowers with the highest credit scores, the Washington- based Mortgage Bankers Association said in a March 6 report.
`Stench of Death'
``My data comes from those that have VA loans, and we haven't seen, as I understand it, a big jump'' in foreclosures, said James Peake, the Secretary of Veterans Affairs in Washington, in a May 20 interview.
The increase may yet be coming: the share of VA loans with payments 30 days or more overdue was 6.49 percent in the fourth quarter, double the rate of 3.24 percent for prime borrowers.
The share of VA mortgages more than 90 days overdue was 1.54 percent, also double the prime rate, according to the bankers' report.
Monique Kelly, a disabled Iraq War veteran, said she is on the verge of adding to those VA delinquency numbers. The former Army staff sergeant in the First Armored Division paid her May mortgage bill halfway through the month and said she won't be able to make June's payment for her house in Owings Mills, Maryland.
Kelly, designated disabled by the VA because of post- traumatic stress disorder, said she bought the property in January for $305,000 and had to spend $10,000 fixing structural problems that were not disclosed to her.
``We fought for our country, and now we have to fight to save our homes,'' said Kelly. ``After living with the stench of death in Iraq, it seems like we shouldn't have to face problems like this when we come back.''
Help for Veterans
The VA has nine regional loan centers in the U.S. that last year provided counseling for 85,000 veterans who had problems with government-backed mortgages, Frueh said. He said he contacted Kelly to see if he can help her.
Counselors also try to help veterans who fall behind on non- VA loans, he said, though they don't track the number of those cases.
``We will always try to intercede on a veteran's behalf,'' said Frueh. ``If they have a VA-guaranteed loan, we can do more for them.''
Military families or veterans refinancing a mortgage have limited resources for VA-backed loans, Frueh said. The government can only guarantee refinanced veteran loans up to $144,000, Frueh said. The median price of a U.S. home was $219,000 last year, according to the Chicago-based National Association of Realtors.
By PAULINE JELINEK
WASHINGTON (AP) - The number of troops with new cases of post-traumatic stress disorder jumped by roughly 50 percent in 2007 amid the military buildup in Iraq and increased violence there and in Afghanistan.
Records show roughly 40,000 troops have been diagnosed with the illness, also known as PTSD, since 2003.
Officials believe that many more are likely keeping their illness a secret.
``I don't think right now we ... have good numbers,'' Army Surgeon General Eric Schoomaker said Tuesday.
Defense officials had not previously disclosed the number of PTSD cases from Iraq and Afghanistan.
Army statistics showed there were nearly 14,000 newly diagnosed cases across the services in 2007 compared with more than 9,500 new cases the previous year and 1,632 in 2003.
Schoomaker attributed the big rise over the years partly to the fact that officials started an electronic record system in 2004 that captures more information, and to the fact that as time goes on the people keeping records are more knowledgeable about the illness.
He also blamed increased exposure of troops to combat.
Factors increasing troop exposure to combat in 2007 included President Bush's troop buildup and the fact that 2007 was the most violent year in both conflicts.
More troops also were serving their second, third or fourth tours of duty - a factor mental health experts say dramatically increases stress. And in order to supply enough forces for the buildup, officials also extended tour lengths to 15 months from 12, another factor that caused extra emotional strain.
Officials have been encouraging troops to get help even if it means they go to civilian therapists and don't report it to the military.
``We're trying very hard to encourage soldiers and families to seek care and to not have them feel in any way, shape or form that we're looking over their shoulder or that we're invading their privacy,'' Schoomaker told a group of defense writers.
Noting that stigma is a problem in American civilian society, not just the military, he said, ``I think that's the preferred way to do it.''
The accounting of diagnosed cases released Tuesday shows those hardest hit last year were Marines and Army personnel, the two ground forces bearing the brunt of combat in Iraq and Afghanistan.
The Army reported more than 10,000 new cases last year, compared with more than 6,800 new cases the previous year. More than 28,000 soldiers altogether were diagnosed with the disorder over the last five years, the data showed.
The Marine Corps had more than 2,100 new cases in 2007, compared with 1,366 in 2006. More than 5,000 Marines have been diagnosed with PTSD since 2003, the data showed.
Navy officials who would have data on Marine health issues did not return a phone call seeking to confirm the numbers released by Schoomaker's office.
Schoomaker said he believes PTSD is widely misunderstood by the press and the public - and that what is often just normal post-traumatic anxiety and stress is mistaken for full-blown PTSD.
Experts say many troops have symptoms of stress, such as nightmares and flashbacks, and can get better with early treatment.
The Pentagon had previously only given a percentage of troops believed affected by depression, anxiety, stress and so on - saying up to 20 percent return home with symptoms of mental health problems. A recent private study estimated that could mean up to 300,000 of those who've served have symptoms.
The Veterans Affairs Department said recently it has seen some 120,000 Iraq and Afghanistan veterans who have received at least a preliminary mental health diagnosis, with PTSD being the most common diagnosis at nearly 60,000.
An undisclosed number of troops also go to private care providers who are part of the huge military health care system. Schoomaker noted that National Guard and Reserve troops often go home to communities where there is not a veterans facility nearby.
``We're working very hard with the VA and with the National Guard and Reserves to get a better feel for, a grasp on, how big this is,'' Schoomaker said, adding that over time officials will be able to collect data and get ``a better feel for, handle on, the numbers.''
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