Imagine you are a member of the military who purchased a home before July 2006, and you and your family love the home. Now, in the middle of a housing slump, you receive orders to relocate.
You immediately place your house on the market only to learn that it will not sell for enough to cover the balance on its mortgage. You feel you cannot afford to “bring funds to the table to close the transaction.” What would you do? Would you lease the home—and trust a tenant to cover the note and handle the upkeep? Would you leave your family in the house, make the mortgage payment and rent an apartment at your new destination? Would you walk away from the mortgage and risk losing your security clearance and damaging your credit?
These options are being faced daily by servicemen and women who find that they “can’t afford to sell their home but they have orders to relocate,” says Katie Savant, Government Relations Deputy Director for the National Military Family Association.
In 2009, Congress and the Department of Defense devised a “mortgage assistance program” to address these issues. However the program is financially overburdened by the sheer volume of requests for assistance. Such cases are especially prevalent in Nevada, California and Florida—where real estate markets deflated the most when the “housing bubble” burst.
What solutions do you feel are the most viable for military personnel and others caught in the growing problem of shrinking values?