Florida military 'Under water' home loans force families apart

Holly Petraeus: 'Under water' home loans force families apart

By TOM PHILPOTT
Special to Stars and Stripes
Published: January 5, 2012

COURTESY OF THE BETTER BUSINESS BUREAU
Many military homeowners who saw their homes plummet in value in the financial crisis still can’t get relief from “under water” mortgages that leave families owing more to loan servicers than their homes are worth.

The situation is especially difficult for the military where families must move every two to four years. Some affected members, on receiving orders to new assignments, are leaving families behind in these homes to avoid a hard hit to family finances or loan defaults, which would harm credit ratings.

Holly Petraeus, head of the Office of Servicemember Affairs in the new Consumer Financial Protection Bureau (CFPB), explained in a phone interview that the burden of under water mortgages remains a major issue for families as she discovered this past year during visits to 15 military communities.

Petraeus, wife of retired Army Gen. David Petraeus, former commander of allied forces in Iraq and Afghanistan, and current director of the Central Intelligence Agency, has spent her entire life in the military. Her father, William A. Knowlton, was also a four-star Army general. Her son too is a soldier so Holly Petraeus also is a military mom.

She noted that many military bases are in states hardest hit by collapse of the housing market, including California, Nevada and Florida, so many members bought homes at prices current markets won’t support.

“I was in Florida recently and had about 300 people at the town halls I did,” Mrs. Petraeus said. “I asked informally how many were homeowners and about half of them raised their hands. I asked, ‘How many of you now owe more than the home is worth?’ And two thirds of the hands stayed in the air.”
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