Morale: The economic cost of service and maybe a little bit of hope for an O3.

“The orders came while Navy Lt. Adam Diaz was winding down a one-year stint in Baghdad: Report to the Navy Annex in Arlington for a new assignment in April. — Given the military lifestyle, the prospect of a move came as no surprise to Diaz, 31, who has spent his adult life in the Navy. The shock came when he spoke with his wife, Stephanie Diaz, about the value of the Jacksonville, Fla., home they bought in June 2006, near the height of the housing bubble. — “Hey, by the way,” she recalls telling him. “The house has been valued for about 50 grand less than when we bought it.”

“Upside down on $50k of equity before having to move for a new set of orders is a significant hit for a Navy O-3. Renting the house will probably cost him $300-$400 a month in uncovered cost. Walking away from the mortgage - as many other people in such situations will do - will make a seven year mark on his credit rating, but a potentially permanent mark on his security clearance.”

“Under (a new congressional) provision, the government will cover 95 percent of a loss if a service member is forced to sell. The government can also choose to acquire the title of a home by paying off the balance of a service member’s mortgage or paying the owner up to 90 percent of the home’s previous value. No dollar ceiling has been set.”

But the devil is in the details, this is only if you purchased your home in 2006 or before. If after 2006,“you should have known better.”
More here…