Not surprisingly, many young military veterans receive little financial education during active duty. Because they are laser-focused on defending our country and doing their duty, there is time for little else. So, once they have been discharged, many are just beginning to learn about saving, as well as how to build their credit and buy a home.
But their lack of financial knowledge can work against some service members and veterans. So-called "lemon" lots exist outside many military bases, offering the lure of an inexpensive car that will later weigh down the service member with unnecessary debt. Other service members and veterans needing money turn to predatory lenders that charge extremely high fees.
VeteransPlus, a national financial literacy organization for service members and veterans, estimates that many military families struggle financially to make ends meet. According to its surveys, one in four military families report more than $10,000 in credit card debt; 21 percent have used high-cost loans, such as payday or title loans in the past five years and only 50 percent have a "rainy day" fund for emergencies.
According to John Pickens III, executive director of VeteransPlus, many service members often face the loss of their home or teeter on the edge of bankruptcy because they don’t have access to the right resources.
Each month, VeteransPlus staff of counselors provide help for several hundred service members and veterans that belong to the Yellow Ribbon Network. The Yellow Ribbon Network is online resource that active service members and veterans can access to simplify their search for financial support and other needs. The network connects service members or veterans with multiple nonprofit organizations across the country that are positioned to help them.
Pickens estimates that 20 percent of these people will need more extensive assistance with issues such as mortgage loan modifications, debt management plans, or bankruptcy counseling.
To provide additional help, HLP, a national nonprofit organization, has recently agreed to begin offering a wide range of free financial counseling and education services for more than 30,000 military service members and veterans who are part of the Yellow Ribbon Network.
The new agreement calls for HLP to connect service members and veterans with free access to HUD-approved housing counselors to provide the following services:
- Prepare them to purchase a home, as well as counseling after they’ve bought their first home to help sustain homeownership;
- Counseling to help avoid a housing crisis, including foreclosure prevention and eviction from rental properties;
- Financial education to improve a member’s credit;
- Access for members of the Yellow Ribbon Network to MyLoanHelp.me as a central source of information about aid programs nationwide, including state and federal government programs as well as private charitable resources.
MyLoanHelp.me is not the only place where veterans can go for help.
By calling the national call center at 1-888-288-3184, or visiting the program’s website www.soldieronsuccess.org, any veteran will be connected with a dedicated team of counselors versed in home retention strategies and resources unique to active military and veterans will work with homeowners.
For example, a veteran that is delinquent on their mortgage loan and worried about foreclosure can receive counseling and help from a HUD-certified housing counselor at no cost. The counselor will gather information from the veteran, help them reduce unnecessary spending and hopefully free up enough money to pay their mortgage.
These counselors, available by phone or online, provide other services, too, including pre-purchase housing coaching to help a veteran make educated decisions about buying a home; counseling after a veteran buys a home to ensure they are making their mortgage payments on-time, loan modifications and workouts, refinancing analysis and reverse mortgage counseling.
The Homeownership Center is also working to provide financial education to veterans. They will offer access to CreditSmart®, Freddie Mac’s multilingual financial education curriculum designed to help consumers build and maintain better credit, make sound financial decisions, and understand the steps to sustainable homeownership.
In addition, veterans also have access to HLP.guru, a new app that connects a tech-savvy generation of consumers with advanced analytics about a person’s credit score, borrowing capacity and other critical information to help them become homeowners. All of these tools will help active duty service members and veterans make better financial decisions and help them build wealth over time.
Mark Cole is Chief Executive Officer of HLP, a nonprofit mortgage technology company based in Baltimore. HLP’s web portal is a one-stop technology solution to help homeowners nationwide ensure that critical documents from distressed homeowners reach mortgage companies. To find out more about HLP’s services, visit www.hlp.org.