Today's Coming Crisis Movie

Sunday, July 31, 2011

Veterans' homes slip away

After the Second World War, returning veterans were welcomed home to two of the most successful government initiatives ever - the FHA and VA housing programs - which put millions of them into their own homes for the first time.

Today, later generations of veterans are being confronted by much different housing policies - ones that can toss them out of homes they've bought with their life savings.

John Aguiar is a veteran of the Gulf War, a former intelligence analyst for the Army who took part in Operation Desert Storm in 1990 when U.S. forces brought Saddam Hussein to heel after he invaded Kuwait.

Aguiar and his wife, Syrena, built a house in Cape Coral, Fla., after relocating from Chicago to be nearer her parents. Using proceeds from the sale of their Chicago house, they bought a lot in a new subdivision in the Cape, a middle-class suburb across from Fort Myers in southwest Florida.

The house they built reflected their values and way of life. It was nothing fancy: a one-story Cape rancher with three bedrooms, two baths, and a two-car garage. There were no granite countertops, no Jacuzzi - just the basics, in keeping with what they could afford. "We always lived within our means," said Syrena. Nor did they see it as a stepping-stone to something larger. "It was all we wanted, a place to raise our kids," said John. "We wanted to retire there."

But the mortgage, like so many at the time, contained a ticking time bomb. Their bank had given them an adjustable-rate mortgage, one of the products being aggressively promoted by the deregulated mortgage industry, and soon they were struggling when their monthly payments ballooned. Then Aguiar lost his job in a housing-materials firm when his division was shut down. He cashed out a pension plan from a former employer, drained his 401(k) account, and worked part time at a Home Depot. "We did everything we could to try to hold on to the house," he said. But it wasn't enough. (more)