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Foreclosure Crisis Falls Hard on Veterans
by: Malcolm Garcia, The Kansas City Star

It was always hard for him to make the house payment.

James Wilson, a disabled veteran of the Iraq War, knows his monthly mortgage payment of $532 doesn't sound like much. But living on a fixed income with a family to support caused difficulties he had not anticipated.

Now he is more than three months behind on his mortgage.

"I'm still working with the lender," Wilson, 30, said. "They're friendly, but they want their money."

Wilson, who survived an ambush and separate car and truck explosions in Iraq, joins other veterans who have found themselves caught in the mortgage crisis.

Although solid numbers on veteran foreclosures are not available, RealtyTrac, a Web site that follows foreclosures nationwide, reported earlier this year that areas with large numbers of military personnel have foreclosures at a rate four times the national average.

For some of the veterans, like Wilson, disability is a major factor. But even veterans without disabilities are having trouble for a variety of reasons: unemployment and repeated calls to duty, frequent relocations that limit the chance to build equity, and low pay for active service members.

Additionally, many military families were targeted by subprime mortgage sellers that opened offices near bases, leaving the families paying higher interest rates and more loan fees.

"They either can't make a rent payment or mortgage payment, or they're losing their car, or at least the threat is there," said Shari Grewe, a transition patient advocate at the Kansas City Veterans Affairs Medical Center for veterans of Operation Enduring Freedom and Operation Iraqi Freedom. She deals with about 35 veterans a day who are having trouble making payments, among other problems.

Like Wilson, Vietnam-era veteran Terry Wright, 57, worries he will lose his house. He receives $894 a month in VA disability payments. He's about $1,500 behind on his Kansas City house, he said. He comes up short every month because of the increased prices of gas and food.

"I owe so much money I barely have my eyes above water," Wright said.

Problems arise when an unexpected difficulty breaks an already thin budget, Grewe said.

"Something comes up and they can't do it," she said. "They lose a job or can't get work in the first place. Maybe when they get out, they can't do the same job they did before. What they were able to live on six months ago doesn't buy the same things today."

Judith Epperson, homeless coordinator at the Robert J. Dole VA Medical Center in Wichita, sees on average three veterans a day who are having problems with mortgage or rent payments. She attributes most of their difficulties to job loss, caused in part by post-traumatic stress disorder. Most of them joined the armed services in 1990 or later.

"Since the spring, we're seeing a lot more veterans in this situation," Epperson said. "A lot more females. A lot have kids. I had one pregnant veteran with two kids. She was let go at her job and had nothing and lost her house."

Epperson also works with veteran Kenneth Green, 51, who served in the Air Force from 1977 to 1981. Last year Green was approved to buy a condominium he had been renting. About the same time he had both his hips replaced and could no longer hold his $60,000-a-year maintenance job. He applied for disability and went through his savings until finally he had to leave the condo. In July, he and his two children moved in with his sister-in-law.

"It's very depressing to go from providing to no income, to go from the status I was in to zero," Green said. "I had big plans. A three-bedroom condo, fully furnished. I had two vehicles, one fully paid for, the other I made monthly payments. I had to give it up too. It hurts. It's not a manly feeling at all."

Wilson, the Iraq vet, expects to receive a foreclosure notice on his house any day now.

He served a tour in Iraq and returned in 2004 for eight months. In May of that year, his convoy was ambushed. One bullet hit his chest, another his back. His body armor saved him.

Two weeks later, a car exploded at a gate to Camp Taji, sending shrapnel through one of his arms and deafening his right ear.

Then, on Sept. 8, 2004, he was on a routine delivery mission into Baghdad. He stopped to fuel the truck, and for a reason that's still unclear, the vehicle exploded, engulfing him in flames and burning 50 percent of his body.

After a lengthy rehabilitation, including diagnoses of post-traumatic stress disorder and traumatic brain injury, he returned to marry a woman he'd met over the Internet. They now have three children.

Wilson was declared 100 percent disabled by the VA and receives about $2,800 a month.

In March 2006, Wilson bought a house at Crystal Lakes, northeast of Excelsior Springs. It needed a lot of repairs. It cost him $1,000 to fill the propane tank that heated the house. Diapers and formula and gas to drive back and forth to doctor's appointments also added up. Bills for pain medication he said he did not receive through the VA consumed his credit card.

"I began thinking, 'I can miss this payment and pay it next month and pay something else this month.' You do that enough you get shut out and can't catch up. Now I think I'm too far behind."

Depending on a veteran's circumstances, the VA can intercede with the lender on the veteran's behalf to pursue options - such as repayment plans and loan modifications - to allow a veteran to keep a home. But many veterans prefer not to turn to the VA.

For instance, many of the Vietnam vets seen by Nicole McCrory, a certified foreclosure intervention and default counselor at Catholic Charities of Kansas City-St. Joseph, do not want to go to the VA.

"Korean and Iraq (era veterans) seem more willing," she said.

Wright, the Vietnam-era veteran, tries to save money by driving as little as possible and spending no more than $50 a week for food. Still, he keeps falling behind with his mortgage.

"I've been in this house since 2002 and really don't want to lose it," he said. "But I'm about ready to pull my hair out and give up."

Wilson did give up when he no longer could afford to heat his house. In May, he and his family moved into his in-laws' house in Kearney. His father is trying to help by taking over his loan, but he expects it will be foreclosed. He is uncertain what his next move will be.

"I just can't afford it," he said. "It's not a good feeling at all."