Foreclosures Victimizing Military Tenants

Foreclosures are victimizing military tenants. Landlords collect rent to pay the mortgage but when the interest hikes the landlords are in trouble. The rent is not sufficient to pay for the doubled or even trebled mortgage. Consequently the landlord succumbs to foreclosure. Simultaneously the tenant suffers as with the onset of foreclosure proceedings the lease agreement becomes null and void.

One of the worst victims of foreclosure is military personnel. A change has been brought about in Joint Federal Travel Regulations. By it the military personnel will be paid by the military authorities if they have to move from their rented quarters because of defaulting landlords. The Deputy Under Secretary of defense for military service personnel Bill Carr approved transportation allowance. The change was effected from 8th August according to Eileen Lainez a spokesperson of the Defense Department. The change is with retrospective effect from 30th July.

It was the date President Bush inked the Housing and Economic Recovery Act of 2008. The new law boosted the falling fortunes of Fannie Mae and Freddie Mac. The latter are two giant mortgage companies supported by the government. Together they hold about half the mortgages in the country. Lack of confidence in their performance fueled by the foreclosure crisis caused their stock to tumble. The bill is expected to help 400,000 houses from the jaws of foreclosure.

The federal regulation will greatly help the military personnel when they have to shift because of foreclosed landlords. It does not however apply to those in the military who own their houses, have defaulted and are facing foreclosures.

Pentagon spokesperson Army Lt. Col Les Melnyk said that the change would be greatly welcome to a good number of service personnel who live in rented quarters instead of buying houses. Only 25% of the military are house owners. Because they are mostly renters, the military community has not been too heavily impacted by the foreclosure crisis like the other communities. But in an indirect way they are suffering because of defaulting landlords who eventually come to face foreclosure. It makes it difficult for them to find new living quarters in a short time in a suitable locality. It is unfair that in such a situation they should have to bear the cost of shifting because of foreclosures. Melnyk added, “This change in the Joint Federal Travel Regulation ensures that they are financially protected when this happens and shows that we as a department care about our troops and their welfare.”

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