Have just read the link to the article on USAA.  I have been a member for about 35 years and have witnessed  decline of service and commitment to the military community.   This is just one more very disappointing manifestation of that decline. 

Military members tend to automatically select USAA for insurance, banking and loans.  I suspect they are still very competitive on insurance products.   As Realtors, we can say that they are almost NEVER competitive on home loans.  Their rates and lending fees tend to be higher and frankly, their service is sub standard at best.   And unfortunately, the same can be said of other well known military focused credit unions.  

Even more disappointing is that the board of directors are composed primarily of senior military officers.   They should be acutely aware of the issues facing military homeowners and develop win win policies for the USAA members.   Shame on USAA!              Joe Gladden

Sorry so late in responding and frankly, can't add much to this other than echo your disappointment to how this is calculated. 

When I initially read the Congressional language from the stimulus bill, it was so convuluted that it was almost impossible to see how this would play out.   I ran several "models" and kept coming up with really disappointing results, like yours, where those who were lucky enough to fall within the window, would still be holding the bag for large sums.   

My recommendation is that you immediately contact your Congressman / Senators and demand a personal audience with them and lay the numbers out and ask them to explain how they could let this happen!  

Please keep us posted.  Joe 

Posted By on 09-30-2009 09:41 AM
Joe,


Thusfar, all I've received from Wells Fargo is the runaround. Documents are being lost, and I've had to contact the Presidential offices to find out what is going on. Because they'd sat on my package, the docs are also now outdated. I now have to fax (again) everything out with updated dates and signatures.

This is interesting.  We just called USAA to see the status of our loan modification package sent 62 days ago and they too said they received it and can see it, but since the "computer didn't assign a tracking number to it", there is nothing they could do and we'd have to resubmit with new dates, sigs, etc.  Ridiculous.  I thought USAA was supposed to be HELPFUL to its military members.  They basically shrugged us off and said, "Yeah, its a glitch in our computer system and there is nothing we can do.  LOTS of people have this happen with their applications."  There is no recourse and they "can't look at it now cause its outdated."  Makes me wonder if banks are "loosing" or having "glitches" so they don't have to help. 

BOOOOO USAA! 

Thanks so much for sending this.  This would open it up a number of folks who otherwise would have missed it by a month or two.  Most settlements take place between 30-60 days after the contract is ratified,   

If you think you now fall into this category, I strongly encourage you to find that contract file, verify the date ratified, and make sure you keep it in a handy, safe place.  Can't say what they will use to verify the contract date, but doubt that it is documented anywhere else other than on the cotract.   If you can't find it, contact your Realtor, their broker, and / or the settlement company.  They are likely going to have them on file in their office or in archive.  

Joe Gladden

This is from the HAP website.  We fall under this category because we closed on the house on 5 July 2006.  This is on the FAQ portion.

[script removed]

Jessica,

To the best of my knowledge there is no move afoot in Congress to move that Jul 1, 06 date. If anyone else has updated info, please chime in.

In the absence of a move of the date, which we strongly support, your options when PCSing are pretty much limited to:

1.  Holding the house and renting.  If you decide to do this, recommend perusing forum on this site:  TAG Property Management for excellent info on renting your home.   You can also advertise your home for rent on this site (MORE SAM) under the "free advertisements" tab on the tool bar.  

2.  Selling the home and covering the deficit.  I know that is one that doesn't sound too good and fully understand how that feels!   The alternative is attempting a short sale and / or loan modification.  In this case, I strongly encourage you peruse the forum on this site, Dave Bryan, Helping Hand Foundation.  Dave is a strong military family supporter,  expert on both and is more than happy to do free consults on the pros / cons / probability of success on these options.  We have had clients use hime with excellent success!

3.  Since you are in the NOVA area, I most strongly encourage you to make an appointment to see your home state Congressmen and Senators!   Have your friends who are in the same situation to write letters and march right in and tell them this is totally unsatisfactory and that the HAP doesn't meet your needs and the needs of thousands more.  Encourage your local NOVA friends to do the same with their Congressmen / Senators.  This is the only way that it will get fixed.  

4.  Since we are also in NOVA, we are happy to discuss your situation, counsel / advise to the extent necessary.  We can provide comparative market analysis and thoughts on the market.  If that would help, just call me at 703 754-3036. 

I wish we had better info, but with everyone's insistence, we can get Congress to get us there!   Hang in there.

Joe

Has there been any progress made regarding the 1 July 2006 cut-off? My husband is active duty Army, and we PCS'd to the DC/Maryland area in July 2006. We purchased our home in August 2006 since on-post housing was unavailable for 18 months+ since the private contractor on Fort Meade opens their housing to DoD civilians and retirees. We are currently underwater $70K(+) on our mortgage and will likely receive PCS orders in the next 6 months to a year. Based on my understanding of HAP, we are currently ineligable for this program based on the cut-off date. There are several other military families that live here with us, that are in the same situation and do not meet the cut-off date. If anyone can give us any information or guidance on what our options are- it would be greatly appreciated.

In response to your first question, this is essentially what the HAP was designed for. It is my understanding (and happy to have any corrections) that if you sold the house yourself (assumes fully qualified for the HAP), the government would reimburse 95% of the difference between the appraised value and what you sell the home for.   

Don't take my math to the bank as it hasn't been fully implemented and the rules are morphing way too fast.    

I won't even speculate on the circumstance in which the government buys the property from you as it seems to be a moving target,.  But maybe someone else has better insight on this.   

Regarding homes that are currently rented out, that is going to be a stickier issue for the implementers to figure out.   Each state is going to have their own landlord / rental laws and it is always problematic listing a home that is a rental.   Your renter has to cooperate with your listing / showing the house, AND the settlement date must be coincident with the end of the lease, unless they agree to move out.   You would most certainly need to discuss with the ACE and perhaps an attorney when it gets closer. 

Probably not what you wanted to hear, but my guess is that as this program evolves, Congress will have to address such issues because you are certainly not alone in this.  

Joe

There is room for optimism in the recent updates.

The $8,000 credit exemption is much needed.. we have service member friends who purchased this year and did not even consider what would happen if they were transferred out in a year or two.. That would have been a HUGE shock to them if they learned they would have to repay.

As well, extending the credit to service members that have been outside the CONUS is wonderful!

I do have a question regarding the %'s.  What are those of us to do if our homes have depreciated substantially.  Example:  Our payoff is around $286K.  According to 3 Realtors who have reviewed comps, the realistic value of the home is $210K now.   Under the current language, can a service member even use this program or would they have to come up with the difference. 

Also, those of us that have tenants in the property.. how would we even begin to gauge using this program.  Example:  Our tenant has 15 months left on their lease.  If we applied for this program, while it's great if it 'doesn't matter' if there's a tenant in the property or not.  But, if we were to apply for HAP and then they start moving along working through applications, the timing is off.  

This completely confuses my husband and I as to whether we should apply.  As mentioned in previous posts, we can not list short sale.

But, if the home goes into foreclosure, should we apply now or wait until it actually goes into foreclosure to recoup costs?  Are details regarding this out yet?

Karen, this is indeed as very positive and encouraging  update 

I am a big believer in momentum.  If you have been waiting on the sidelines, wait no more.  Call your Congressmen / Senators and tell them to get  behind this. 

But this is really just a start.  It is critical that they also drop the arbitrary July 1 2006 date that eliminates so many people.  And we should still be very aware that the percentages that apply can leave Military Families holding the bag for subtantial losses even if they qualify.

Finally, we should use this as a spring board to get a permanent fix in place similar to that enjoyed by other federal employees. 

Don't wait!  It's your money and your family!  Get involved.  You can use the link found on the moresam home page (upper left) to write your letter.   Don't hesitate to pick up the phone and call them...THEY WORK FOR YOU! 

Joe

Thanks.  In the very near future (ie. next week) we will post on this forum and other areas in the MORE SAM site a petition for Realtors who serve and support Military Families to the National Association of Realtors to urge them to support our effort by pushing Congress to engage this issue.   Thanks for you continued interest and please stay tuned. 

Joe

The “HAP less”  HAP

(Homeowner’s Assistance Program)

By Joe Gladden, Realtor®, (Captain, USN, Ret.)

Managing Partner, Veteran Realty Serving America’s Military, Inc. (VR SAM®)

With Congress’ undivided attention on Health Care Reform, many of the “Housing Assistance Programs” have lost the momentum and oversight necessary to remove the tremendous bureaucratic obstacles and make them successful.    At best folks who have been through the loan modification process will tell you that it is a long, miserable process.  More often than not, loan mods are nothing more than an exercise in futility that is pre-requisite to beginning the short sale process, yet another complex, lengthy, and stressful process.         

Nowhere is this truer than in the Military Homeowner’s Assistance Program (HAP) which has been an utter failure to date.   You must be thinking, “man, this guy is really a pessimist.”   Actually, I was most encouraged when Congress finally acknowledged that Military Families were hit hardest, and most unfairly, by the “housing crisis” by including it in the stimulus package.   Many Military Families held out hope that the HAP would be the answer to their dilemma.    But now six months after the Military HAP was thrown into the February Stimulus as a last minute add on, our sources tell us that not one dime of the $550M appropriation has gone to a single Military Family.   And now many Military Families are running out of time and hope.  Many now see the short sale, with the implication for credit, clearances and careers, as their only hope for avoiding a complete financial apocalypse.   

 The poorly written Congressional language has undoubtedly been problematic for the Army Corps of Engineers and DOD to interpret and implement (my interpretation).   It was essentially a “cut and paste” from the original HAP, that was established in the 1960’s to assist Military Families and DOD federal employees impacted with a base closure (BRAC).   Below are some of the typical questions frequently on our forum.   They highlight the confusion on the critical elements of the policy.   Likewise our responses to these questions are an assimilation of information from forum participants, Military Families, and we thank them for their assistance in sharing their information.     The forum link is at the end of this article.    

1.       Will I be reimbursed at 95%, 90%, or 75% of the appraised or market value)?  The Congressional language is very confusing on this issue. 

2.      Who will determine the appraised or market value, and on what date will it be based?

3.      How long does the process take?

4.      We couldn’t wait for the HAP due to PCS orders and rented our house out.  Will the home still qualify as our primary residence?

5.      This was an actual question that came to us about one month after the stimulus bill was passed.   “We bought our home on July 1^st, 2006.   Are we eligible for the HAP?”   The very unfortunate answer, per our interpretation of the Congressional language, is “No, you missed the window by hours.”   The July 1, 2006 date applies to folks who are not otherwise eligible for the “wounded warriors” section of the program. 

6.      “Will I be taxed on any amount forgiven?”    This is the question that is holding up implementation of the program.  While we are not CPAs, we understand that as presently written, yes, you would be taxed on these amounts but Congress is apparently trying to rectify this.

Understandably, the Army Corps of Engineers is reluctant to give definitive answers until DOD guidance is completed.  

It is important to note that depending on several factors such as the original price of the home, the appraised or market value determination, and which percentage (95%, 90% or 75%) applies, the losses to the Military Family could still be very significant.    Also, we believe that homes that have been rented out may still qualify as “primary residence,” and thus for the HAP.   But  this has not been definitively clarified.

Also, folks who participate on our forum tell us that the Army Corps of Engineers is accepting applications but then are told that they could wait as long as nine months after the implementation issues are resolved before their applications would be considered due to the building backlog!   While this is anecdotal, we have had numerous comments to this effect and this alone renders the program ineffective for families who need to dispose of their house and PCS NOW!   In some cases, they must put a renter in the home and now have a lease obligation that further complicates the timing of any sale of the home, HAP or HAPless.   (Ok, bad pun!).       

Well, am I the only one who sees this as an ineffective program?   We conducted several polls over four months with the following results:

94% of the respondents believed that “The HAP was an inadequate fix for Military Families hit hard in the housing market.” 

98% of the respondents believe that “Military Families should receive a full tax credit for losses incurred due to losses on their homes incident to PCS moves.”

And 99% of respondents believe that “Military Families should enjoy parity in benefits (paid settlement costs and protection from catastrophic losses on home sales) as some other federal employees.”

In a nutshell, we contend that like other federal agencies and corporations, expenses and losses associated with PCS moves are indeed an expense of employment and should be paid, or at least mitigated in some manner (tax credits),  by the employer.  We believe it is a reasonable expectation by those (and their families) who defend our country!  

Finally, we know that thousands of Military Families are struggling with many of the issues addressed in this article.  We offer to them the opportunity to tell their stories, to see that they are not alone in this mess, and the chance to share what they have learned to the benefit their fellow service  members on  http://www.moresam.net/Forum.aspx. 

Thank you for serving! 

www.moresam.net    www.vrsam.com   homesformilitary@vrsam.com

copyright Joe Gladden, VR SAM 2009

republished with the permission of military.com