As part of the Huffington Post's efforts to bear witness to the effects of the current economic environment on ordinary Americans, we're rounding up some of the most compelling stories reported by local news organizations around the country.
Air Force Staff Sgt. Jason Goul is one of many veterans and soldiers trying to buy foreclosed homes for their families. The soldier, his two young children and his wife, Judith, looked for a place around the town of Fairfield in northern California, and placed a couple of bids using a mortgage backed by the Veterans Affairs Department. The plan was to get a home started before he was deployed to the Middle East in August. Unfortunately, though, their offers were repeatedly denied by banks which preferred to sell houses to investors who could pay in cash -- even if the bid was lower, reports Carolyn Said of the San Francisco Chronicle. Sgt Goul has since been shipped overseas and the couple still don't have a home of their own.
In a growing trend, banks are refusing to honor VA-backed loan agreements -- which do not require a down payment and are more amenable to customers with bad credit -- preferring instead to sell foreclosed homes for less money, but quick and immediate cash.
Banks and VA representatives blame the high standards that houses must meet to qualify for VA-backed loans: home repairs must be completed before escrow closes, the escrow period is longer and if escrow does not close the buyer's fees are repaid. Other loans have no such requirements and make it easier to sell damaged and structurally insecure homes.
"Lenders know the requirements for VA and FHA [Federal Housing Administration] loans, and they know whether a property is in good repair or disrepair," said Mark Bologna, director of loan guaranty service for the VA in Washington, D.C. "If they have a property they believe won't meet the minimum property requirements, they will factor that in. They know they'll either have to cover those costs (of repair) or the sale will fall through unless the home buyers can cover those costs out of pocket."
Despite banks' concerns, however, VA-backed mortgages actually have a lower failure rate than subprime, FHA-insured, or even prime loans; only about four percent of VA loans go into default, compared to 29, seven, and five percent for the other loans, respectively. Jessica Donigan, a realtor at Gary Kent Homes in La Jolla, CA, has shown veterans homes that they were eventually denied. "It's very frustrating and disheartening," she said. "I've heard a lot of vets say they feel they're being discriminated against, that it's not fair."
The resistance to sell homes to veterans using VA mortgages comes during a year when demands for such loans is skyrocketing and the government, in the form of the VA, is urging home buyers back into the market, reports Roger Showley of the San Diego Union-Tribune. In San Diego, for instance, VA-insured loans are up almost 290 percent in the last 12 months.
The Veterans Affairs Department's loans, introduced after World War II but revamped with a new limit of $593,750, are attractive to veterans looking to buy a first home and retread the path of earlier generations of former soldiers who returned from war and invested in their home economy.
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A new Shared Work trend is making its way across Washington state, as noted by Seattle radio station KPLU. A number of companies are signing up for the program, in which all workers sacrifice and cut back on hours but no one gets laid off and everyone keeps their benefits. Workers demonstrate solidarity and companies see benefits as well:
Last year, The Gear Works laid off eight people before they heard about the possibility of shared work from one of their vendors who had done it too. Company President Sterling Ramberg says they've been in survival mode. But, as he explained at a news conference during their morning coffee break, cutting trained workers isn't smart.
"The investment that we put into the employees over the years - you know, hundreds of thousands of dollars go into training just one employee - is enormous."
Seventeen states offer such a program, according to Victoria Knight of the Wall Street Journal, and enrollment is up nationwide. Employers like it because it keeps them well-stocked with experienced workers when the economy turns around, and employees are glad to keep their job and full benefits even if it means a slight pay cut.
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Guillermo Barrera, 36, worked as a cook at a late-night diner in Brooklyn, New York, when he was fired for going to the hospital in the middle of a shift, reports Michael Saul of the New York Daily News. Now Barrera is joining a rally organized by Make the Road New York to demand paid sick leave for all employees across the city. Andrew Friedman, co-executive director of Make the Road New York, is planning on suing Barrera's former boss and making sure that his story never happens again. "There is a high cost of not having paid sick days, and that cost is borne by hundreds of thousands of workers like Guillermo who are forced to make a fundamentally unfair choice between their health and their ability to pay rent or feed their families," he said.
HuffPost readers: Seen a good local story? Heard about a heroic judge, neighbor, or doctor helping people stay in their homes? Tell us about it! Email jmhattem@gmail.com.