Home Equity Assistance & "Military Families Pushed to Financial Ruin" (Merge)

[acooper]

Ahh, but if you're assuming someone is there for a 2nd income, there may well be kids too, no?  It's easy to find a situation where it's not worth it to have the 2nd parent work outside the home, because of the costs associated (gas, 2nd car/public transport, etc). And military wives can have a hard time maintaining a career, if their husbands get posted somewhere else every couple of years.

And in today's economic climate, for a new member, they may be coming into the CF with some significant debt accumulated. It's part of why my DH joined up - we couldn't find him a steady job in Windsor. While our debt isn't overwhelming, it IS significant. Much of it is still working on paying off his schooling costs from a decade ago...

In the end, I guess I more agree with TimBit, than you, dapaterson - it is far likelier to end up over that 32% mark, at least at Cpl pay...

 

[TimBit]

Sorry, I had missed the semi-monthly. I agree with you, it is feasible. But it is tight. And in some areas of the country, that tightness will get you a sad worn-down trailer home while in others it will get you a beautiful two storey house with huge backyard.... hence I do feel a bit for those folks who bought expensive homes in Edmonton and are now feeling the pinch...

Now it's part of the service, so, we have to live with it. But that doesn't mean we have to like it.

 

[heavy reader]

Ah, there's the kicker.  "Its part of the service, so we have to live with it".  The HEA loss is not something we have to deal with as a side effect of being in the military.

Our predecessors fought hard to get the entitlement of 100% HEA out of Core as a relocation benefit due to the unique characteristics of military service (see SCONDVA).  This is our policy, in place to offset these catastrophic losses of tens of thousands of dollars. The fight for the policy has already been fought and won, however there is no intent to honor it.  Treasury Board Secretariat refuses to acknowledge that there are any DEPRESSED MARKETS in Canada, even when provided with the proof.  (We demonstrated well over 20% decrease in town's home sales between purchase and sale time).

I was once one of those young gunners who moved out of the PMQs, got into the housing market, lived in a hovel.  Had a few kids and got bigger houses as I moved.  Clipped coupons and cut my own hair.  Did all my own repairs and drove a piece of crap to save for the family.  We never bought above our means, we were on the road to security, saving where we could and nothing lavish. In the last posting to Edmonton (2007) there were very few housing choices available (lineups with bidders in their cars).  We lucked out and got a house way out in the sticks with little more than a Husky and a liquor store in the town.  Cost us everything, but we had equity from all those years of scrooging.

Now, due to this all of the equity we carefully built up, gone.  Our family savings, gone.  Having to beg the "support agencies", family and friends to russel up enough for a down payment for the next posting (plus paying more CMHC as we did not have enough for the downpayment.  Plus, the added enjoyment of paying the interest on money we borrowed to pay back the bank for the old mortgage. 

Where does that leave my family?  In two years when my mortgage comes up for renewal, my debt ratio will be so high that I will not be mortgageable. We cannot rent due to our family size. After 23 years service, this lack of constitution behind our policy will leave me broke and my family homeless.  Is this the thanks I deserve for years of service.  How about the young guy who is in the same situation and doesn't have any equity.  He'll get the same advise that SISIP gave me - declare bankruptcy.  Hey, wait a minute, how's that going to help me get a house next posting?  I didn't bail on any of my previous loans, or my other responsibilities.  Never reneged on a student loan, or declared bankruptcy.  I've dealt with my responsibilities without passing them off to the little guy.  I'm carrying the non-reimbursed portion of HEA loss on my shoulders at $1000/month (interest charges) until this is resolved. Shouldn't our Treasury Board have the same level responsibility?  After all, they promised it to us all.

Perhaps the message we are getting is that our representatives will bail out a car company, but they  won't bail out a soldier, even when promised (in writing).

 

[TimBit]

Wow. That's a horrible story. Good luck. As a taxpayer, I hope we help you out in the end.

 

[captloadie]

http://www.cfgb-cgfc.gc.ca/english/2010-012.html

The link above is to a grievance to the current HEA policy. I think the CDS decision on this will be very interesting. Although it doesn't look like the grievor will satisfied with the response, the follow on recomendations may fix the current issue members are having with the HEA. Or it may close the door on the argument for the foreseable future. Hopefully it won't take three years for a decision.

 

[going_broke]

Read both the case summaries (2010-012 and 2010-015).  Looks like any way you try to get 100% HEA, the TBS has hatches down, and grievances are denied.  Yeah, nice that the Board is recommending the policy review , but I remember reading a different grievance from 5 years ago with a policy review recommendation, and the policy still has not been reviewed.  So... 3 years for CDS to render a decision, then 10 years for policy review...

Has anyone tried submitting a request for 100% HEA based on "exceptional expenses" (also requires TBS approval) rather than proving a depressed market?

 

[Maritimegal]

People are not receiving the outcomes they are hoping from the grievance board, but keep up the fight and don't quit. Once all military channels are exhausted, there are other ways to have your voices heard. Don't give up!

 

[going_broke]

So the Ombudsman was visiting our base.  After his presentation I had an opportunity to chat with his "G3 Ops" person about the 100% HEA.
Apparently, Ombudsman's office so far has only 3 complaints about the equity loss and compensation (although they expect more to come).  I was told 3 cases are not enough to push for a policy change (and privatly the person expressed opinion that with the current fiscal situation it is likely that rules would be tightened, not relaxed).  Therefore, the Treasury Board's position is that the "Home Departments" should deal with exceptional cases on case-by-case basis.
But here's the catch - CDS does not have an authority to award monetary compensation, even when policy is considered to be unfair, as CFGB findings to two grievances (2010-012 and 2010-015) state.  The Ombudsman's office in March 2010 submitted a report on deficiencies of the grievance system to the Minister (you can read more on that here http://www.ombudsman.forces.gc.ca/mr-sm/nr-cp/2010/1805-eng.asp), where it recommended granting such authority to CDS.

The bottom line as I see it - the Treasury Board is not going to change the HEA policy, and CF right now has no power to compensate for equity loss beyond the 15,000.  I hope that the Minister's office does not take forever to grant powers to CDS; in the meantime I will keep stealing colleagues' lunches from the fridge  :-\

 

[Maritimegal]

Heavy Reader: You should add an option for those whom have their homes listed, have not yet sold, but plan to apply for HEA. I know of at least 3 families presently in that situation.

 

[PuckChaser]

Email just started floating around the DWAN about this. Gist of it said the Army didn't make you buy a house. They didn't add that they put people in the position to need a house when they move to an area with limited PMQ or overpriced rental options.

 

[going_broke]

A new grievance posted on CFGB site, http://www.cfgb-cgfc.gc.ca/English/2010-043.html

Read the whole thing yourself, but this particular line (referring to Edmonton, of course) just made me shake my head and repeat WTF several times...

"""There was no initial authority (IA) decision as the grievor denied the IA's request for an extension of time. However, at the Board's request, the staff of the DCBA provided additional information regarding the matter. The DCBA staff advised that TBS would not have reviewed the grievor's file as TBS had already considered the greater metropolitan area in which the grievor's community was located, determined that it was not a depressed market area, and advised the DCBA not to send any further files from that metropolitan area."""

 

[Occam]

A new grievance posted on CFGB site, http://www.cfgb-cgfc.gc.ca/English/2010-043.html

Read the whole thing yourself, but this particular line (referring to Edmonton, of course) just made me shake my head and repeat WTF several times...

"""There was no initial authority (IA) decision as the grievor denied the IA's request for an extension of time. However, at the Board's request, the staff of the DCBA provided additional information regarding the matter. The DCBA staff advised that TBS would not have reviewed the grievor's file as TBS had already considered the greater metropolitan area in which the grievor's community was located, determined that it was not a depressed market area, and advised the DCBA not to send any further files from that metropolitan area."""

TBS' new motto:  "Any evidence which does not support our conclusions must be considered to be in error and discarded".

What I don't understand is this:  The press went into a tizzy when a dozen MAATS students got dinged for a $2200 repayment of a claim overpayment (which was DND's fault), and the Ombudsman made a stink about it and got them their money (+ interest) back.  This is $50,000 we're talking about in the case of the HEA policy and the posted grievance.  One would think the press would have a field day with that..."TBS not following their own rules".

 

[PuckChaser]

So, that email I was talking I received again. It was sent to various formation CWOs, but if you didn't get it, PM me for the full text. Here is the summary (names and emails removed), emphasis added as shown in the email text:

To summarize the reply from DGCB:

-  The Home Equity Assistance (HEA) policy contained in CFIRP is a two-tiered approach to compensating CF members when they lose money on the sale of their home.  TB has agreed to take on some but not all of this risk.  The policy reimburses 80% of a member's loss up to a maximum of $15,000 from the core envelope. The numbers are very specific leaving no room for the exercise of Ministerial authority. The policy also allows members to use all the remaining funds in their customized and personalized envelopes if their loss exceeds the $15,000 cap.  The second tier of the policy is when TBS identifies a market as "depressed".  As a guideline the TBS looks for a 20% drop in market values for the market as a whole. When this occurs, TBS may authorize the reimbursement of up to 100% of the loss. At the moment there are no markets in Canada that have been declared depressed markets by TBS.

-  For the most part, the first tier of HEA is adequate to deal with most CF members losses in the real estate market.  Only a very small subset of the CF population that moved were adversely affected by markets that dropped in the last year or two.  A miniscule percentage of the whole.

-  On the question of offering advice, this becomes a dangerous area. We currently don't tell anyone whether they should or shouldn't buy a house. This is clearly a personal matter left to the individuals' own judgement. A large number of the people that realized significant losses had purchased properties that appear to be a higher risk in a falling market.

-  There is no means of re-introducing a different version of HEA without TB approval.  TB is satisfied that the current policy is satisfactory.

 

[armyvern]

So, that email I was talking I received again. It was sent to various formation CWOs, but if you didn't get it, PM me for the full text. Here is the summary (names and emails removed), emphasis added as shown in the email text:

There is a bit in that email (not included in your exerpt) that goes to the basis of fair market value having been paid for those homes. IIRC, there's also a comment or two about pers paying too much for houses due to bidding wars etc and a leaning towards those pers having paid too much for their homes (way above the home's actual value) - a loss that TB is not obligated to assume for them. That paying vastly inflated proces above a home's actual value do not a "depressed market" make when those homes start selling lower and more in line with their actual worth/value.

Even under previous programs where we had "guaranteed home sale" etc, this was based on "fair market value" of the home and not what you or I, or anyone else, paid for our home. This was brought up at the beginning of the thread.

"Fair market value" / actual worth is an important feature because - if it weren't included in the basis for re-imbursement then there's nothing stopping any single one of us from walking up to a home sale and saying "sold to me for 1 million dollars" and expecting the TB to cover our losses when we sell it for it's actual value (say 250k) next year when we are posted out again.

I also guarantee you that if losses covered weren't inclusive of the caveat that the buyer is expected to pay 'fair market value' (& that if he pays an inflated price then HE assumes the risk for that, not TB) - then we'd have a bunch of millionaire troops out there "paying their million" and expecting 100% HEA to cover their loss when they sell it to the next guy. We could make all of us rich this way --- just keep cycling these homes through mil families at ever growing grossly-inflated prices over & over ... and expecting 100%HEA (ie: the Canadian taxpayer) to pay us out any losses.

It's just not going to happen - and that's the problem with everyone's theory that no matter WHAT we pay for a home, it's TB's job to cover our losses to 100%. I'm of the theory that if I pay 40% over the value of the home because I got in a bidding war with someone - that's my choice --- not TBs ... and that's a risk I assumed, not TB.

 

[Pusser]

Well said ArmyVern.  :nod:

 

[Maritimegal]

Some excerpts from a recent grievance posted:

"With his submission, the grievor included evidence that the real estate market in his community of over 750 homes had declined by approximately 30 percent and that there were specific reasons for the decline. In particular, the grievor's community was comprised of manufactured housing on leased land, which had been in great demand at the time the grievor purchased his home; however, the inventory in the area had caught up with the market around the time of his sale and prices had adjusted downwards accordingly"

"The DCBA staff advised that TBS would not have reviewed the grievor's file as TBS had already considered the greater metropolitan area in which the grievor's community was located, determined that it was not a depressed market area, and advised the DCBA not to send any further files from that metropolitan area."


This is ridiculous. The IRP manual states that you need to prove the "community" in which you reside is depressed 20%, not the "metropolitan area" as TBS states. The grievor provided evidence. Unreal.

Keep pressing. Don't give up.  Mahatma Gandhiirst says it best, "First they ignore you, then they ridicule you, then they fight you, then you win"

 

[GINge!]

Email just started floating around the DWAN about this. Gist of it said the Army didn't make you buy a house.

Yes, that is the response I got from DCBA "mbr made a personal decision to buy a house"

What they failed to address was that 'personal decision' was based on written comms from IRP stating my penalties would be 100% covered (not HEAP, a different issue). IRP 's answer was "Sorry we made that mistake, but we are not financially liable for providing wrong advice". My loss was 'only' $10k which I had creph negociate down to $5k...still, $5k is a year of fun money for us.

 

[heavy reader]

Update:

Just got my Access to Information back from Treasury Board Secretariat (TBS).  The request was for "Policy, policy clarification, application of rules, guidance, restrictions, limitations or eligibility concerning relocation benefits for Canadian Forces - specifically referring to 100% Home Equity from Core Envelope for the period of 2006-2010. S.5.8.2.13 of CF IRP policy".

TBS amended the request in their response to read: "Policy, Policy clarification, application of rules, guidance, restrictions, limitations of eligibility concerning relocation benefits from Core Envelope for the period 2005-2010. 5.8.2.13 CF IRP Policy".

TBS Response: "Please be advised that after a thorough search through our files, no records related to your request exist within Treasury Board Secretariat".

This indicates to me that there has been no direction given to DCBA or other relocation decision making authority about the eligibility of those applying for 100% HEA out of core.

Implying that the requests are not being forwarded to TBS (in accordance with policy).  This is the exact same situation as another soldier whose grievance was mentioned earlier (http://www.cfgb-cgfc.gc.ca/english/2010-043.html). 

As for the status of my grievance, it was misplaced, but due to the quick actions of a young OCdt, was found and put back on track.  As for the Treasury Board, after seeking information on how to proceed, they instructed me to discuss the issue with my union rep.  Wow.  I wasn't aware that the CF was unionized.  Something new every day I suppose.

Have a happy new year.  Don't give up, ever.

Ubique!

 

[captloadie]

Heavy Reader: You should add an option for those whom have their homes listed, have not yet sold, but plan to apply for HEA. I know of at least 3 families presently in that situation.

These families should be made aware of this issue before they sell. If it were me, I wouldn't be gambling my financial future on the hopes the policy changes. Hard decisions might have to be made, like going IR, or renting at the new location instead of buying.

 

[going_broke]

Finally sold the house, for $76 loss (after 9 months on the market).  And still was glad, since TDRA $$ just run out 2 weeks ago.  Now let's the real HEA dance begin.