Foreclosures Rise in Military, Army Wife Goes to Battle

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While her husband serves his country, military spouse Nicole Rosen is fighting her own war to keep their home. The family moved to Washington State from Oklahoma in 2005 for Staff Sgt. John Rosen's military duty and purchased a home at a high interest rate. Soon after, Nicole quit her job after her now-4-year-old son was diagnosed with kidney disease. With the steep drop in income, the family fell behind on its mortgage payments. Now Rosen manages a tax office part-time, takes care of her two young sons, and fights to keep the family's Tacoma, Wash., house out of foreclosure.

In July 2009, after multiple requests for loan modifications, the family found out their home was slated to be sold at a trustee sale a mere 10 days before the scheduled auction. Frightened and outraged, the Army wife decided to fight.

Like the Rosens, an increasing number of U.S. military families are unable to meet their mortgage obligations, according to recent findings from RealtyTrac, an online marketplace for foreclosed properties that identifies a 10-percent foreclosure rate spike in military ZIP codes.

Before receiving notice of her property's sale, Rosen said she repeatedly sent loan modification requests to her mortgage lender, IndyMac Bank (now, OneWest Bank). Yet she received no response. When she finally reached an IndyMac employee via telephone, she was told that her loan modification "was being worked on." But a few weeks later, the Rosens were hit with news that they had only 10 days to vacate their property before the house was put up for sale by the Regional Trustee Services Corporation.

"I was not properly notified regarding the sale, and I immediately fought back," Rosen says, referring to her decision to get the sale stopped herself, since the Rosens couldn't afford to hire a lawyer. Calls and e-mails to IndyMac/OneWest Bank for comment were not returned.

Rosen requested foreclosure relief under the Servicemembers Civil Relief Act (SCRA), intended to reduce the financial burdens of military personnel during a period of active duty; however, her request was summarily denied.

In such situations, individuals can turn to The U.S. Department of Veterans Affairs, which offers a counseling program that the general public does not have access to, says Eli Tene, foreclosure expert and president of iShort Sale. Other than that, Tene says, military families have the same options as the rest of the U.S. population: loan modifications and short sales. "When a property goes to liquidation, lenders are taking the same position with the military as with the general public," Tene adds.

The Rosens' case was no exception. Even the involvement of elected Washington State officials -- a regulatory agency in Olympia, Wash., and the attorney general -- did in the foreclosure process with IndyMac.

So the Army wife took the only way out: She filed an emergency petition for bankruptcy. "I only needed the paper saying I had filed. I received that paper and then faxed it to the trustee. That immediately bought me another 30 days," Rosen says.

She then did her law homework, and went to court to present her case to a judge at the Pierce County Superior Court. She received an injunction for 90 days, during which her house was scheduled to be sold two or three more times.

At the end of the 90 days, Rosen went back to court and presented her case to a different judge. She won an injunction and a trial date for this coming July. "I have been to court on three different occasions and, as of yet, none of the defendants [IndyMac and Regional Trustee Services Coporation] have shown," Rosen says.

The Rosens stopped paying their mortgage in January and are currently $50,000 underwater. If the July court date provides no relief, the family may be out of luck.

Nicole Rosen admits it's tempting simply to walk away. "I'm so far behind now that the bank won't accept any payments unless it's a large amount," Rosen says. "Plus, why throw good money after bad? If I am unable to work out a modification with the bank, then a payment here and there would not do any good."
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