Nellis airmen taking hits in housing crisis

WASHINGTON -- More than a thousand airmen who have been stationed at Nellis Air Force Base have been trapped in the Southern Nevada mortgage crisis, unable to refinance and taking losses on their homes when they are reassigned, according to an Air Force survey.

The study conducted in the past month underscores how the valley's housing market mess has not spared those in military service. Within individual units at Nellis, estimates have run as high as 65 percent of homeowners struggling with mortgage issues.

Rep. Joe Heck, R-Nev., released survey results showing some 740 airmen are upside down on their mortgages but don't qualify for a Pentagon mortgage aid program. Another 263 who have been reassigned or have received "must move" orders have been unable to sell their homes at a break-even price. Some rent out their homes at a monthly loss.

Thirty-two airmen are in foreclosure, and 98 have completed or are in the process of completing short sales of their homes.

"This is nearly 1,200 service members just at Nellis Air Force Base who are impacted by the declining real estate market," Heck said. That amounts to 13.4 percent of the base military population, which was set at 8,932 in a 2009 report.

The numbers have been given to Congress as part of an effort to reform a Pentagon program that is intended to help military personnel and civilians who encounter mortgage problems when their bases close or when they are reassigned.

But that program is running a backlog and projects a $400 million deficit this year. And its requirements exclude most of the airmen in Southern Nevada, where the housing crash occurred later, and much more severely, than in other parts of the country.

Heck, a colonel in the U.S. Army Reserve, said the figures did not surprise him.

The mortgage struggles of soldiers and airmen are a common topic in conversations on military bases where move orders are forcing unique hardships.

"We have people who are being forced to move, not because they've decided it is time to move or sell their homes, but because the military has said it is time to move," Heck said.

"They don't have the option to ride out the market and hope their home values return," he said.

"Any major base in a region with depressed housing -- which is about anywhere there is a base -- has experienced the problem to a degree, but we have seen it much more in Southern Nevada," Heck said.

Las Vegas has been declared ground zero in the foreclosure crisis. Nevada has the highest foreclosure rate in the nation, affecting one in every 97 homes in April.

The House Armed Services Committee approved a 2012 defense policy bill on Wednesday night that focuses in part on military homeowners.

A provision added by Heck calls for a study of the problem at Nellis and Creech Air Force bases, including possible solutions. A report would be due by Sept. 30.

Heck said the mortgage crisis is creating a readiness problem in the military.

"Service members become distracted by personal and financial issues, rather than focusing on their mission," he said. Further, a soldier's ruined credit can make it difficult to keep or obtain security clearances.

The House bill contains provisions aimed at the Homeowners Assistance Program, which was devised to provide subsidies to soldiers and civilians who suffered losses on home sales when their bases closed or were downscaled, causing local markets to droop.

The program was expanded in the 2009 economic stimulus bill. It now also covers personnel who bought their homes before July 1, 2006, but who sold them because of permanent relocations between Feb. 1, 2006, and Sept. 30.

The problem is that the mortgage bubble did not burst in Southern Nevada and some other parts of the country until later, meaning Nellis airmen who purchased homes after July 1, 2006, do not qualify.

Lawmakers in the defense bill are calling on the Department of Defense to put together a plan to divert "unnecessary" military construction spending to make up a $400 million shortfall in the housing aid program.

The department also is being told to consider hiring extra temporary staff to attack a backlog that has caused delays of up to a year in applications for aid.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or
202-783-1760.