According to a recent report in The Washington Post, the foreclosure freeze may not necessarily be a welcome development for federal employees with security clearances.
Specifically, it is preventing many of them from resolving their mortgage issues and returning to a position of financial stability.
Why is this so important?
All federal employees granted security clearances are observed by various security agencies for any sign of financial problems that could make them particularly vulnerable to bribery or blackmail. This includes the inability to make mortgage payments/mortgage issues.
Unfortunately, the halt in foreclosures is leaving many federal employees stuck with their mortgage issues. As a result, red flags will be raised with investigating security agencies and these federal employees may then lose their security clearance (and ultimately their job) because they are deemed a security risk due to their mortgage issues.
Worse yet, it appears as if no relief may be in sight as foreclosures have not yet resumed in the D.C. area, home to almost a third of all federal employees with security clearance.
"Resolving debt is more complicated when the lenders are in paralysis," said Dennis Sysko, a national security attorney. "The longer it is unresolved, the longer the cloud remains."
One longtime federal employee - who declined to be named- is worried about the state of her employment. She is currently behind on mortgage payments on three investment properties and is attempting to speak with Bank of America about the possibility of a loan modification.
"I'm hoping the freeze will work for me instead of against me," said the employee who has held a security clearance for more than 20 years.
Unfortunately, the loan modification may be her only option.
"If the foreclosure moratorium continues and she is unable to successfully modify her loans, she's left with the financial concerns that could lead to her termination," said John P. Mahoney, a Washington D.C. attorney.
(One final note, Title 11 §525(a) of the U.S. Bankruptcy Code states in part, "a governmental unit cannot deny, revoke, suspend or refuse to renew a license, permit, charter, franchise, or other similar grant .. deny employment ... terminate the employment ... discriminate ... against a debtor under the Bankruptcy Act ..."
What this means is that the federal government would much rather see people with security clearances seek protection and obtain a fresh financial start via bankruptcy law than strip them of their security clearances.)
Stay tuned for more from our San Antonio bankruptcy blog ...
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Foreclosure Freeze Could Put Security Clearances at Risk (The Washington Post)
Comments: Leave a comment