By Mark Wolf
Military veterans and active duty personnel face a plethora of financial roadblocks ranging from loan scammers to housing issues.
During a panel on Creating Financial Pathways for Military Veterans at NCSL's Legislative Summit, lawmakers were told of the extent of the challenges and some potential solutions.
Holly Patraeus, assistant director of the Consumer Financial Protection Bureau, said employment issues for deployed military members were often overlooked. If they are unemployed when they are deployed, the are unemployed when they return, she said.
"We know some of them chase deployments to keep the military pay coming in or they register for school for the GI Bill stipend," she said. "Both of those are short-term solutions."
Declining home values can be devastating to military families, said Petraeus.
"It puts them in a real bind if they get orders to move, the house is underwater and they can't sell it for enough to pay off the mortgage or can't rent it for enough to cover the payment. In 37 years of military service, we moved 24 times and never lived in the same house more than two years," said Patraeus.
Patraeus said veterans are also prey for unscrupulous lenders, especially those who are based out-of-state or out of the country where they are harder to prosecute if they are engaging in predatory practices.
"Put in the search term "military loans" and you get about 58 million responses, may of them extremely expensive or complete ripoffs where they are asked to send money upfront to qualify for loans or to help veterans get approved for VA benefits," she said.
Todd Hill, director of government affairs for the Financial Services (FSR), which represents the nation's largest integrated financial services company, outlined Project Patriotism, a Homes-For-Veterans program which plans to rehabbing distressed properties and either giving or selling them at reduced market value to qualified veterans.
Several of the financial institutions within in the FSR already have veterans' housing program. Project Patriotism aims to establish a a framework to bring the efforts under one umbrella. Hill said that an estimated 500 properties had been donated and that the number could grow into the thousands over the coming years through partnerships with miltary third-party groups and non-profits.
As outlined, a lender identifies a non-profit which selects a candidate, a property is located and rehabbed, the candidate is prepared for home ownership through financial education and the property is transferred.
The process is neither quick nor easy, Hill stressed. It can take 2-4 years to move the property from a bank to a non-profit and then to the candidate. Rehabbing and refurbishing can take several months and costs from $15,000 to $45,000.
"There are only so many properties available out there," he said. "The challenge is to increase the inventory pool and sustain it for two to five years."