Monday, January 7, 2008

Housing glut could help wounded

Housing glut could help war wounded
By Michelle Roberts - The Associated PressPosted : Friday Jan 4, 2008 12:44:58 EST

CIBOLO, Texas — The glut of unsold houses pocking the nation’s newer neighborhoods may be just what the doctor ordered for thousands of wounded service members facing homelessness and serious financial hardships since returning home from Iraq and Afghanistan, advocates say.
Operation Homefront, a nonprofit that aids the families of deployed and wounded service members, has launched what it says is a first-of-its-kind effort to match wounded soldiers with lenders and home builders to help them buy homes at prices they can afford in communities near Veterans Administration medical facilities.
“Especially with so much inventory, it seems like the perfect match,” said Meredith Leyva, co-founder of Operation Homefront.
The physical wounds suffered by the more than 30,000 service members injured in Iraq and Afghanistan are often followed by financial chaos as the families absorb extra travel and living expenses, forgo combat pay and transition to civilian life with a disability, Leyva said.
Her group, which helped 1,700 injured service members’ families pay utility bills or other living expenses last year, is seeing more families fall into bankruptcy and the threat of homelessness, she said.
A service member who is injured and decides to leave the military usually qualifies for disability payments. But oftentimes, it can take 18 months to get military, Veterans Administration and Social Security benefits determined, said Leyva.
Meanwhile, families — many of whom are young and had little savings — fall behind on bills at a time when travel expenses for medical treatment are climbing and they are least able to work, she said. Their credit is badly damaged, and they must move out of base housing when the service member is discharged from the military.
Veterans have access to VA loan guaranties. But the limits mean they don’t offer much help in many housing markets, and in any event, lenders still apply typical creditworthiness requirements to mortgages, Leyva said.
On average, it takes 6 months for VA to determine disability payments, and the lag can get longer if a veteran appeals to get a larger amount, said VA spokesman Jim Benson.
“That’s a tough amount of time to wait,” he acknowledged.
The agency has been working to decrease the wait, but the workload and paperwork requirements often bog down processing, he said.
The VA, which is primarily concerned with medical care and disability, doesn’t track bankruptcy among wounded veterans but has estimated that 195,000 veterans are homeless on any given night. As many as twice that number have been homeless within the last year, the agency said. Many of the homeless are Vietnam-era veterans.
“These systems are superbly designed to deal with medical issues,” Leyva said. “They are not designed to deal with the messy lives of these service people.”
To launch what it hopes will be a model for other wounded service members, Operation Homefront helped Spc. Austin Johnson and his wife buy a home in Cibolo, northeast of San Antonio. They moved in Thursday.
Johnson suffered a traumatic brain injury from a blast in Iraq last August. While he was being treated in San Antonio for stuttering, memory loss and other symptoms, his wife and three children were in a rollover accident while driving from El Paso.
On a windy desert stretch of interstate, their sport utility vehicle rolled over. All three children, ages 2, 5 and 9, were killed.
Physical and emotional wounds were then followed by financial ruin. Johnson and his wife, Monalisa, had to file bankruptcy, crushed by the extra expenses of travel and other unanticipated costs at a time when paying bills seemed unimportant.
“We’re trying to take it day by day,” Monalisa Johnson said Thursday.
The Johnsons’ case is an extreme example, but Leyva said financial woes and even bankruptcy are common.
For the Johnsons, Operation Homefront raised the down payment from donors, and USAA, an insurer and financial services company for service members and their families, helped secure a lender that would buy the Johnsons’ mortgage. Homebuilder KB Home donated furnishings.
But Amy Palmer, Operation Homefront’s executive vice president, said the group, which has a $13 million annual budget, is trying to convince builders with unsold homes to sell the houses at a substantial discount to wounded service members.
The group has approached major home builders and lenders, asking them to look at a wounded veteran’s pre-injury credit rating and consider selling at a substantial discount. The nonprofit will pay mortgage points and closing costs to help make the deals workable, Palmer said.
So far, they’ve been able to work out a few individual deals but hope to get a more widespread program launched.
Karen Mawyer, USAA’s executive director of secondary marketing, said the skittish credit market makes finding banks to offer mortgages to folks like the Johnsons especially difficult.
“We won’t be able to help all of them,” she said.
But looking at a wounded veteran’s pre-injury creditworthiness helps, and the historical performance of other veterans can help convince banks to lend to wounded veterans, Mawyer said.

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