By Michelle Roberts
His lifelong dream of becoming a soldier had, in the end, come to this for Isaac Stevens: 28, penniless, in a wheelchair, fending off the sexual advances of another man in a homeless shelter.
Stevens' descent from Army private first-class, 3rd Infantry Division, 11 Bravo Company, began in 2005 — not in battle, since he was never sent off to Iraq or Afghanistan, but with a headfirst fall over a wall on the obstacle course at Fort Benning, Ga. He suffered a head injury and spinal damage.
The injury alone didn't put him in a homeless shelter. Instead, it was military bureaucracy — specifically, the way injured soldiers are discharged on just a fraction of their salary and then forced to wait six to nine months, and sometimes even more than a year, before their full disability payments begin to flow.
"When I got out, I hate to say it, but man, that was it. Everybody just kind of washed their hands of me, and it was like, `OK, you're on your own,'" said Stevens, who was discharged in November and was in a shelter by February. He has since moved into a temporary San Antonio apartment with help from Operation Homefront, a nonprofit organization.
Nearly 20,000 disabled soldiers were discharged in the past two fiscal years, and lawmakers, veterans' advocates and others say thousands could be facing financial ruin while they wait for their claims to be processed and their benefits to come through.
"The anecdotal evidence is depressing," said Rep. John Hall, D-N.Y., who heads a subcommittee on veterans disability benefits. "These veterans are getting medical care, but their family is going through this huge readjustment at the same time they're dealing with financial difficulties."
Most permanently disabled veterans qualify for payments from Social Security and the military or Veterans Affairs. Those sums can amount to about two-thirds of their active-duty pay. But until those checks show up, most disabled veterans draw a reduced Army paycheck.
The amount depends on the soldier's injuries, service time and other factors. But a typical veteran and his family who once lived on $3,400 a month might have to make do with $970 a month.
Unless a soldier has a personal fortune or was so severely injured as to require long-term inpatient care, that can be an extreme hardship.
The Army, stung by the scandal last year over shoddy care at Walter Reed Army Medical Center in Washington, has been working to help soldiers during the in-between period, said Col. Becky Baker, assigned to injured soldier transition at the U.S. Surgeon General's Office.
In a change in policy that took effect last August, the Army is allowing wounded soldiers to continue to draw their full Army paychecks for up to 90 days after discharge, Baker said. It is also sending more VA workers to Army posts to process claims more quickly, and trying to do a better job of informing soldiers of the available benefits and explaining the application process.
"We make certain that we've covered all the bases before we discharge the soldier," Baker said.
She acknowledged, however, that the changes have been slow to take hold across an Army stretched by war. "It's definitely a practice that is new. It takes awhile for new practices to be institutionalized," the colonel said.
Stevens was moved to the Operation Homefront apartment after a social worker at Tripler Army Medical Center in Hawaii, acting on her own initiative, rescued Stevens from a homeless shelter there.
"This is a situation where someone used their common sense and they did the right thing, versus saying, `This is the rules. We can't do this,'" Tripler spokeswoman Minerva Anderson said of the social worker.
Typically, the first 100 days after discharge are spent just gathering medical and other evidence needed to make a decision on disability, VA officials say. If paperwork is incomplete, or a veteran moves to another state before the claim is decided, the process can drag on longer. Disagree with the VA's decision, and the wait time grows.
"The claims are a lot more complicated than people think," said Ursula Henderson, director of the VA's regional office in Houston.
Amy Palmer, a disabled veteran and vice president of Operation Homefront, which helps newly disabled servicemembers, said: "Nobody's assigned to them. You're on your own once you get out."
Hall is pushing legislation that would force the VA to use compatible computer systems and more consistent criteria and to reach out to veterans better.
"A veteran goes and serves and does what the country asks them to do," the congressman said. "But when they come back they're made to jump through these hoops and to wait in line for disability benefits."
Simon Heine served three tours in Iraq as a tank mechanic before he was discharged with severe post-traumatic stress disorder.
His wife quit college so she could figure out how her four children could live on less than $1,000 a month. Eventually, she moved the family of six into an Operation Homefront apartment so they could finish navigating the bureaucracy and wait out the arrival of Social Security and VA benefits.
"It is like giving you a car and taking the steering wheel off. They say, `There is the gas and the brake. Just go straight,' and hopefully, you are going in the right direction," Heine said.
By E. Scott Reckard
When developer Empire Land sought protection in U.S. Bankruptcy Court in Riverside in April, its biggest debt by far -- $5.1 million -- was to PFF Bank & Trust.
Southern California's oldest bank, PFF -- formerly Pomona First Federal -- had doubled its loan portfolio to $4 billion over the last decade, in large part by financing residential developers and builders of affordable housing in the Inland Empire.
But the bank's losses on such lending has soared, sending the stock price of its parent company, PFF Bancorp, down 90% this year. Desperate for fresh capital, the company agreed Monday to be acquired for $30.5 million in cash.
Home-mortgage specialists may have been the first lenders to suffer for their roles in financing the housing bubble. But, as foreclosures rise and home prices fall, many smaller banks and thrifts that backed residential developers and home builders are watching black ink turn red and are spending uncomfortable amounts of time with regulators. The financial institutions also are enduring jabs from critics who say they tossed lending standards out the window.
PFF Chief Executive Kevin McCarthy said in an interview that his bank started pulling back on land loans two years ago, anticipating a downturn like "the normal economic cycles we've always had out here."
"But nobody foresaw what would happen to the housing market, or that sub-prime mortgages would collapse so completely," he said. As for the sale to Oak Park, Ill.-based FBOP Corp., parent company of community banks including California National Bank, McCarthy said it was a hard but necessary choice: "I'm doing this to keep as many employees on the job as I can."
Community banks embraced commercial lending in recent years, largely ceding home loans, credit cards and other mass-market products to big national players.
Residential construction loans, which generate big fees, were especially profitable for smaller banks -- until housing collapsed in places like the Inland Empire, where prices are down more than 30% from their highs, and the Central Valley, where some former boom markets are off more than 40%. Raw land on which Ontario-based Empire Land installed roads, sewers and utilities, expecting to then sell it to builders, has declined even more.
"In the Inland Empire, we're hearing land is going for 20 or 30 cents on the dollar" of its appraised value when the loans were made, said RBC Capital Markets analyst Joe Morford.
According to data tracker Foresight Analytics of Oakland, 15.8% of single-family home construction loans were at least 30 days delinquent in Riverside and San Bernardino counties last quarter, up from just 1.7% a year earlier. The delinquency rate was 14.7% in Los Angeles County, 14.9% in Orange County and 15.4% in Ventura County. It was 30.4% in Merced County, near Sacramento.
Regulators were late to recognize the severity of the problems with these loans, Morford said. But this year they have taken notice.
In a report last week on regional economic activity, the Federal Reserve said of conditions in the West: "Credit quality eroded a bit further, mainly for loans related to the housing sector, with the most significant adverse impacts on asset portfolios noted for smaller community banks."
Regulators are now aggressively requiring banks to write down the value of questionable loans and to raise more capital to make up for those write-offs. That creates a pinch for banks, one that is apparent in their regulatory filings.
Security Pacific Bancorp of West L.A. -- which resembles in name only the former L.A.-based banking giant acquired in 1992 by what is now Bank of America Corp. -- has written off millions in dud Inland Empire housing loans. In a recent order, the Federal Deposit Insurance Corp. and state regulators required Security Pacific, with $585 million in assets, to diversify its operations, cut off deadbeat clients and "determine that the lending staff has the expertise necessary to properly supervise construction loans."
Other Inland Empire-based construction loan specialists also are feeling the pain.
Corona-based Vineyard National Bancorp, with $2.3 billion in assets, lost $70 million in its last two quarters, and its stock is down 82% from a year ago. It has blamed inland housing loans, though it also specializes in another tricky business, financing builders of expensive custom homes in West L.A., the South Bay and coastal Orange County. Its executives declined to be interviewed.
Regulators now classify Vineyard and its subsidiary, Vineyard Bank of Rancho Cucamonga, as troubled. The company had postponed its annual meeting while it negotiated for new investment, but said last week that discussions with an interested party had fallen through.
Some of the Asian American community banks that have prospered in Southern California also have been forced to swallow housing-related losses. Aaron J. Deer, an analyst at Sandler O'Neill & Partners, cut profit estimates recently for Pasadena's East West Bancorp and Los Angeles' Preferred Bank and Cathay Bancorp, whose core depositors are ethnically Chinese, because of exposure to construction and related loans.
Home builder troubles haunted even City National Corp. of Beverly Hills, the Southland's largest commercial bank with more than $15 billion in assets. City National avoided the riskier segments of home-mortgage lending and suffered none of the losses on mortgages and bonds backed by home loans that have plagued larger competitors.
But City National's clients have always included home builders, and the bank paid the price as losses on builder loans contributed to a 22% drop in first-quarter earnings. That was despite the fact that such loans made up only 5% of the company's $11.8-billion loan portfolio, and few of them were made in the Inland Empire or Central Valley, CEO Russell Goldsmith said.
Nor are out-of-state banks immune to the problems here. Central Pacific Financial Corp., a Honolulu bank that sought to diversify on the mainland, said Inland Empire construction loans played a major role in the $54.2 million in loan losses recorded by the company in the first quarter, up from just $4.3 million a year earlier.
Central Pacific Chief Executive Clint Arnoldus said the bank, with $5.8 billion in assets, has a "solid plan" to "aggressively manage our California loan portfolio." But he added that it was tough to make projections about a turnaround.
"No one can predict when California's housing market will stabilize," he said.
By E. Scott Reckard
When developer Empire Land sought protection in U.S. Bankruptcy Court in Riverside in April, its biggest debt by far -- $5.1 million -- was to PFF Bank & Trust.
Southern California's oldest bank, PFF -- formerly Pomona First Federal -- had doubled its loan portfolio to $4 billion over the last decade, in large part by financing residential developers and builders of affordable housing in the Inland Empire.
But the bank's losses on such lending has soared, sending the stock price of its parent company, PFF Bancorp, down 90% this year. Desperate for fresh capital, the company agreed Monday to be acquired for $30.5 million in cash.
Home-mortgage specialists may have been the first lenders to suffer for their roles in financing the housing bubble. But, as foreclosures rise and home prices fall, many smaller banks and thrifts that backed residential developers and home builders are watching black ink turn red and are spending uncomfortable amounts of time with regulators. The financial institutions also are enduring jabs from critics who say they tossed lending standards out the window.
PFF Chief Executive Kevin McCarthy said in an interview that his bank started pulling back on land loans two years ago, anticipating a downturn like "the normal economic cycles we've always had out here."
"But nobody foresaw what would happen to the housing market, or that sub-prime mortgages would collapse so completely," he said. As for the sale to Oak Park, Ill.-based FBOP Corp., parent company of community banks including California National Bank, McCarthy said it was a hard but necessary choice: "I'm doing this to keep as many employees on the job as I can."
Community banks embraced commercial lending in recent years, largely ceding home loans, credit cards and other mass-market products to big national players.
Residential construction loans, which generate big fees, were especially profitable for smaller banks -- until housing collapsed in places like the Inland Empire, where prices are down more than 30% from their highs, and the Central Valley, where some former boom markets are off more than 40%. Raw land on which Ontario-based Empire Land installed roads, sewers and utilities, expecting to then sell it to builders, has declined even more.
"In the Inland Empire, we're hearing land is going for 20 or 30 cents on the dollar" of its appraised value when the loans were made, said RBC Capital Markets analyst Joe Morford.
According to data tracker Foresight Analytics of Oakland, 15.8% of single-family home construction loans were at least 30 days delinquent in Riverside and San Bernardino counties last quarter, up from just 1.7% a year earlier. The delinquency rate was 14.7% in Los Angeles County, 14.9% in Orange County and 15.4% in Ventura County. It was 30.4% in Merced County, near Sacramento.
Regulators were late to recognize the severity of the problems with these loans, Morford said. But this year they have taken notice.
In a report last week on regional economic activity, the Federal Reserve said of conditions in the West: "Credit quality eroded a bit further, mainly for loans related to the housing sector, with the most significant adverse impacts on asset portfolios noted for smaller community banks."
Regulators are now aggressively requiring banks to write down the value of questionable loans and to raise more capital to make up for those write-offs. That creates a pinch for banks, one that is apparent in their regulatory filings.
Security Pacific Bancorp of West L.A. -- which resembles in name only the former L.A.-based banking giant acquired in 1992 by what is now Bank of America Corp. -- has written off millions in dud Inland Empire housing loans. In a recent order, the Federal Deposit Insurance Corp. and state regulators required Security Pacific, with $585 million in assets, to diversify its operations, cut off deadbeat clients and "determine that the lending staff has the expertise necessary to properly supervise construction loans."
Other Inland Empire-based construction loan specialists also are feeling the pain.
Corona-based Vineyard National Bancorp, with $2.3 billion in assets, lost $70 million in its last two quarters, and its stock is down 82% from a year ago. It has blamed inland housing loans, though it also specializes in another tricky business, financing builders of expensive custom homes in West L.A., the South Bay and coastal Orange County. Its executives declined to be interviewed.
Regulators now classify Vineyard and its subsidiary, Vineyard Bank of Rancho Cucamonga, as troubled. The company had postponed its annual meeting while it negotiated for new investment, but said last week that discussions with an interested party had fallen through.
Some of the Asian American community banks that have prospered in Southern California also have been forced to swallow housing-related losses. Aaron J. Deer, an analyst at Sandler O'Neill & Partners, cut profit estimates recently for Pasadena's East West Bancorp and Los Angeles' Preferred Bank and Cathay Bancorp, whose core depositors are ethnically Chinese, because of exposure to construction and related loans.
Home builder troubles haunted even City National Corp. of Beverly Hills, the Southland's largest commercial bank with more than $15 billion in assets. City National avoided the riskier segments of home-mortgage lending and suffered none of the losses on mortgages and bonds backed by home loans that have plagued larger competitors.
But City National's clients have always included home builders, and the bank paid the price as losses on builder loans contributed to a 22% drop in first-quarter earnings. That was despite the fact that such loans made up only 5% of the company's $11.8-billion loan portfolio, and few of them were made in the Inland Empire or Central Valley, CEO Russell Goldsmith said.
Nor are out-of-state banks immune to the problems here. Central Pacific Financial Corp., a Honolulu bank that sought to diversify on the mainland, said Inland Empire construction loans played a major role in the $54.2 million in loan losses recorded by the company in the first quarter, up from just $4.3 million a year earlier.
Central Pacific Chief Executive Clint Arnoldus said the bank, with $5.8 billion in assets, has a "solid plan" to "aggressively manage our California loan portfolio." But he added that it was tough to make projections about a turnaround.
"No one can predict when California's housing market will stabilize," he said.
No comments:
Post a Comment