Skip to comments.Living in Military Family Housing or Living Off-Base (Away from predatory mortgage brokers)
Posted on 10/28/2018 1:05:39 PM PDT by Hostage
Members who have dependents usually have the option of living on-base in the military family housing for free, or off-base and receive a monthly housing allowance. Members who are assigned to locations where dependents are not allowed to travel at government expense (such as basic training, and some unaccompanied overseas assignments) can live in the barracks for free, and still continue to receive the housing allowance (for the location of their dependents), in order to provide a household for their family members.
At some bases, members may not have a choice. When I was stationed at Edwards Air Force Base, in California, all First Sergeants and many commanders were required by local regulation to live on-base. It is because the Wing Commander wanted his senior leadership readily available at all times. The closest livable off-base town is Lancaster, which is about 45 miles away from the main base.
Guess what? The loan sharks are ignoring the rules or playing games with the rules. Veterans, active service members and their families are being played.
Many of the same cast of characters, the same con artist loansharking culture that germinated and grew during the Bush-Clinton-Bush-Obama presidencies spanning the S&L Crisis of 1990 to the repeal of Glass-Steagall driving private label MBS violating centuries of tested underwriting standards resulting in the biggest heist in history pulled off against the American economy culminating in a devastating collapse of mortgage markets and a financial blowout, this segment of the financial culture has found military members to push their addictive financial meth on.
And before anyone says it’s the fault of military members, we need to understand the history and conditions that allow this addictive financial opium to be peddled in a military service background.
First, these loans are just as damaging as alcoholism and drug addiction. A young service family that is trying to learn the ropes of growing a family in an environment of low pay for military members, they are doing their best to create a good environment for their children, many who will become military members one day.
These families need financial counseling for sure but such counseling is not a cure. These families are an inch away from food stamps if not already on them. But giving pay raises is not the solution.
We want our service members of rank at least E-5 or higher to have the opportunity to grow a healthy solid family, to eventually buy a home in a decent area. E-4s and below can live in barracks or rent apartments in town and should be counseled as to costs associated with having children at such low ranks. It doesn’t take that long to be promoted to E-5 so they should know to wait before having children (at one time you could not be married until a rank of E-5 was attained). And we want them all to eventually have children and to have a great home environment for their children.
There is a way to achieve the above and it does not require anything new, it only requires looking back to the military life of yesteryear, not so long ago actually.
Before severe military budget cuts were made starting in the GHW Bush presidency, military members of certain ranks could live in a modest home on base and their children went to military schools which were rated higher than public schools. They could save a lot of their pay for a down payment on their eventual first home purchase.
Single-family homes of modest design are not expensive and can be put up quickly on bases. Rather than raise military pay to meet the high costs of living offbase and providing prey to liar loan scammers, the idea is to remove the prey from the con artists waiting to push them into GSE guaranteed loans they cannot afford, pushing them into financial distress, perhaps to foreclosure, to divorces, to children raised in broken homes. The social military family bloodbath created by predatory loan brokers is every bit as devastating as cocaine, meth, heavy alcohol.
Most young military families are unfamiliar with how to manage finances. Many commands have required such families to get financial counseling and lectures as a matter of routine. This has gone on for decades, it is not new.
What has happened in recent decades to the military family way of life is not something to be proud of. The benefits and subsidies have been outsourced to predators who see young military families as food.
As the cost of living has escalated the service pay has not kept up forcing many military families to wade into risky credit situations.
Heres an example:
A military parent is getting paid at the end of the week. The family needs to pay rent and theres not much left for food and utilities, etc. The parent receives on any given week several flyers and mailers about applying for a credit card. The family applies and receives a credit card with a $300 credit line, just enough to buy food until the next payday.
After about 6 months, the military family has paid their $300 credit card balance on time responsibly. The credit card company rewards them by automatically increasing their credit line to $1500. The addiction grows, the loanshark pushes more of the financial meth, the family acts responsibly for a time until an incident or event occurs such as a death in the family, a marriage, a vehicle breakdown, etc. any event that causes the family to step outside their responsibility zone and use the extra credit line.
Before they know it, the upright responsible military family is in a lot of debt and they struggle to get out from under it as the service members pay is stretched to more than they can bear. Often this forces the spouse to seek work outside the home to make ends meet. As the family is stressed, thoughts of separation or divorce begin to emerge and a path to a breakdown comes into view.
Before Bush 41, this scenario was not so prevalent because the military was much more supportive of military housing for families and education for military children. This kept military families insulated from the civilian loan practices that have grown today to be predatory.
In Todays World, living within ones means is vital but not always feasible with a family to take care of. A military member can live within his/her means if they remain unmarried, childless, living in low-rent apartments and staying out of the way of most civilians. Its doable that way but is not healthy for future generations of military members and certainly not an attractor for recruitment.
Is FHA one of those predatory lenders?
Is Fannie Mae one of those predatory lenders?
No, FHA is a GSE that insures loans. Ginnie Mae is a part of the federal government and oversees the VA home loan activity.
Oh. Are they one of the predatory lenders?
The problems you mention, make me wonder if, any personal finance/money management education, is part of any military education or training programs.
Especially with young service members, for whom the military is their first real job, and in most cases being stationed far from family and friends, it’s easy to see how they fall prey to predatory credit card or loan schemes.
Ginnie Mae is not a lender but a guarantor for veterans. Mortgage brokers that perform in the VA home loan certification are required to follow Ginnie rules and policies. Ginnie bonds are suffering as a result.
The point is that DOD and VA can push for budgeting into bringing back family housing and on-base schools for military children rather than push for pay raises to accommodate a high civilian cost of living.
Military pay is low and this causes morale and recruitment to suffer. Rather than blow holes in budgets by raising military pay, it’s much more cost effective to build modest homes on military bases and house military families so that they can save money. This would also be a huge boost to recruitment.
What is happening is that military families are so stressed financially that they fall prey to predatory mortgage brokers. The loans add to their distress and lower morale.
Before Bush 41, military families were housed on-base and their children went to schools run by DOD, and these schools were very highly rated.
Pushing military families with low pay into the high cost civilian sector is simply a bad situation.
“We want our service members of rank at least E-5 or higher to have the opportunity to grow a healthy solid family, to eventually buy a home in a decent area.”
The Army used to say lieutenants may not marry; captains may marry; majors should marry.
It’s a bit more complicated in the Navy.
Whew. I was worried that someon was going to say the government oughta do something.
> “The problems you mention, make me wonder if, any personal finance/money management education, is part of any military education or training programs.”
Some commands have in the past required its members to attend credit and financial counseling.
President Trump needs to be briefed on this aspect of military life and how it became so negative to military families.
Historically, one of the biggest attractors to military service members were the benefits to on-base living. Along the way, starting with Bush 41, military families were pushed out into the high-cost civilian sector and their pay falls further behind.
Economically, it makes much more sense to restore the older practices pre-Bush 41 that worked and were attractive rather than blow budget holes via military pay raises.
I think POTUS would get that in a NY second.
I think the worst thing a young enlisted could do is buy a house near a base.
I have seen deployments become permanent. In the First Gulf War, many units were returned to a different permanent bases elsewhere when the fighting was done.
Base closures still happen. It really sucks to suddenly own a home nobody wants and you have to leave.
Rent off base. Be part of the community but not tied to the market there. We did so in Germany and it was the best experience of our lives. Got to really understand the people and language. Rarely had to cook for ourselves; friends always wanted us to come over. Through my many purchases of Weber grills I taught the neighborhood to really grill and BBQ, American style! Oh, and we even had a guy deliver beer and wine to our house, twice a week.
Wait. if you’re planning on a military career, live on base and save money. Someday, you WILL own property, and have a nice nest egg to pay for a lot of it.
I didn’t buy a house until I was an E-8 and getting ready to retire. I bought a farm, actually, and a nice quiet one in the country. Still loving it, 21 years later!
Considering that a lower ranking member will need to go through the VA as they will not qualify for a conventional loan, it is unlikely they didn’t receive a proper loan.
Marine Corps recruits were told if the Marine Corps wanted you to have a wife they would have issued you one.
No it is a predatory situation.
Recent Ginnie Mae data have shown a thousand percent (1000%) uptick in home equity loans by service members and veterans.
Ginnie Mae is furious at mortgage brokers that are pushing their predatory loans on these members.
A historical solution is to house military families on-base so they can save money and where they won’t be distressed so much they need to take out these predatory loans. They should know better but it’s easier said than done. It causes service members to leave the service because they can’t make ends meet without going into a lot of debt. And the predatory loan sharks are so deceptive, they make the service members believe it’s the right thing to do to get further and further into debt.
> “Rent off base. Be part of the community but not tied to the market there.”
Yep, totally agree this should be the way to go for young enlisted, either that or live on-base in barracks.
Wow. You have a pretty low opinion of the mental capacity of our fighting men and women. Are you John Kerry?
> “Considering that a lower ranking member will need to go through the VA as they will not qualify for a conventional loan, it is unlikely they didnt receive a proper loan.”
That’s the essence of the situation. Ginnie Mae (a federal government agency) put out rules to prevent this and yet the loan sharks are pushing it strongly onto veterans.
Military pay is very low compared to the civilian sector.
President Trump should NOT raise military pay in excess of COLA because it can blow a hole in the budget. Instead, he can order a plan to bring back the benefits of living on-base which historically allowed service members to SAVE money rather than become debt slaves to loan predators.
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