http://news.yahoo.com/s/ap/20050625/ap_on_..._loans_military

There ought to be a law against charging people such interest rates.

I've heard of car dealers near military bases doing something similiar. They'll sell someone a vehicle for what looks like a great deal but the person ends up paying a huge amount of interest over a long time.

This may be a good issue for Democrats to take up to show support for the troops. To pass legislation putting a cap on the interest rate one can cahrge someone serving in the military.

Way back when I was a Lance Corporal and had a brand new bride I can remember buying a stereo which we made payments on for 12 months. 22 year old people do stupid things, that stereo was worth about 90 bucks but I bet we ended up paying close to 300 for it.

They got another gimmick too to get around interest rate caps, its called "Rent to Own". If you got no credit and not a lot of money and you need something they kind of have you over a barrel. It's either play their game or do with out, I ended up doing without for a couple of years to get a little money ahead.

Why only the military ?

These military loan outfits target people in the 'cause they know that they'll get their money as all they have to do is contact the military, show them the contract and the money owed will be garnished from the person's pay check. The military, in a way, acts like a collection agency.

If someone purchases an item, they ought to pay for it but the rates ought to be resonable.

Are you sure this is legal ?

A "collection" agency ?
More like a Wall Street funds manager to me. Only it's the military's money and they don't earn a cent.

My feeling is if military personel couldn't see through the lies recruiters told them, there's not much chance in our trying to save these folks, from falling for a car dealership's scheme with outlandish interest rates. " a fool and his money, are soon parted"

Wrote e-mails to both of my Seantors and Congressman about this and suggested there ought to be a limit as to what interest rates can be charged to military people.

Got an auto reply from my Congressman, Bart Stupack, stating they have recieved my e-mail and I ought to get a real reply sometime soon. I don't expect to hear anything for awhile. It being the holiday weekend and all.

Some to lose hundreds in pay Monday

Submitted by: MCB Camp Pendleton
Story by: Computed Name: Lance Cpl. Antonio Rosas
Story Identification #: 2005728132916




MARINE CORPS BASE CAMP PENDLETON, Calif.(July 28, 2005) -- Untold numbers of servicemembers residing off base will see their next paycheck shrink by as much as $250 -- and many of them may not even know the blow is coming.

Disbursing shops at several 1st Marine Division and 1st Force Service Support Group battalions surveyed over the past week said they learned only recently about the elimination of "geographic rate protection" under the Basic Allowance for Housing.

The change, outlined in Marine Administrative Message 315/01 and slated to take effect Monday, shelves a DoD policy enacted nearly five years ago. The old policy allowed servicemembers to retain higher housing allowances even when they moved to cheaper neighborhoods, said Master Sgt. Ervin Ramos, staff noncommissioned officer-in-charge for the Consolidated Personnel Administration Center, Headquarters and Support Battalion, Marine Corps Base.

“It’s money that you don’t rate,” Ramos said. “Some Marines will have to prepare themselves for the pay cut.”

Ramos is among administrative Marines sounding the alarm. By early last week, he had already sat down with 40 Marines in his battalion affected by the change, he said.

But many others on base may not find out except via the MarAdmin, the grapevine or the sticker shock of a leaner paycheck.

One example of how drastic the slash in income will be: An E-7 with family members currently drawing San Diego BAH will now draw Camp Pendleton BAH — and stands to forfeit $422 per month.

Staff Sgt. Elliot T. Threat, a substance abuse control officer with Headquarters and Support Battalion, commutes 60 miles one way every day and stands to lose $600, he said.

He was previously stationed at Marine Corps Recruit Depot San Diego and received permanent-change-of station orders to Camp Pendleton — but continues to draw the MCRD rate.

Until Monday.

His current BAH rate matches his mortgage, he said.

“I’m worried because I’m just waiting on a response from headquarters. I’m not prepared,” he said.

Threat, originally from San Jacinto, said he doesn’t know whether he’ll have to sell his home. He’s still mulling his options.

Under the old system, an E-5 transferring to Camp Pendleton could retain his previous rate at Miramar based on proximity.

If Headquarters Marine Corps did not authorize a move, servicemembers were allowed to maintain a physical address anywhere within the geographic area.

Geographic rate protection is expiring because BAH rates have climbed so that servicemembers no longer have to pay out-of-pocket expenses for housing, Air Force Col. Virginia Penrod, DoD’s director of military compensation, said in an American Forces Press Service article.

But Ray Solly, a retired master gunnery sergeant who’s now a realtor in Escondido, said no out-of-pocket costs in San Diego for home buyers is a pipe dream.

“I think they’re looking at the national picture. They’re not looking at the situation in San Diego County,” said Solly, adding that he helps at least a dozen servicemembers a year buy homes — though mostly not in San Diego County.

Solly said a master sergeant with a family, and a housing allowance of $1,696 a month, can’t come close to the $2,302 he’ll pay monthly for a three-bedroom, two-bath home larger than 1,500 square feet. And that’s a home valued at $400,000 — even though most homes with those specifications go for $450,000 or higher, he said.

Even with an interest-only loan, the monthly payment — $1,875 — requires money out of pocket.

To avoid pocket dipping, servicemembers are moving to southwest Riverside County, and commuting an hour or more each way, for a chance — no guarantees — to make it on BAH alone.

“They’re willing to commute to realize the American dream,” he said.

Individual Rate Protection — which insulates servicemembers against rising housing costs — will remain in effect despite the changes, as long as servicemembers stay within the same geographic area, according to the AFIS article.

If average housing costs go down, people already living in the area will continue to receive the higher amount.

However, servicemembers moving into the area will receive the lower amount, according to the article.

Under new BAH guidelines, a servicemember moving to a new area will receive the appropriate BAH rate for that area, regardless of whether troops already living there are receiving a higher rate, Penrod said.

http://www.marines.mil/marinelink/mcn2000....58?OpenDocument

Wow! My mortgage payment is $230.00 a month. My previous residence was a two story house with four bedrooms on 57 acres that also included a two car garage, a barn and a couple of other buildings. The monthly payment for that was $600.00 which included taxes and insurance.

I was stationed in California on three ocassions, each time had we not got base housing we would have had serious financial problems even with BAQ. Housing in San Diego is out of sight in cost, it's not as bad around Pendleton or Twentynine Palms.

California has wonderful weather but horrible housing cost.

Waiver could stem losses in BAH
Submitted by: MCB Camp Pendleton
Story by: Computed Name: Sgt. Luis R. Agostini
Story Identification #: 200583223623





MARINE CORPS BASE CAMP PENDLETON, Calif.(Aug. 3, 2005) -- A local disbursing officer says some servicemembers facing shrinkage in their housing allowance because of a new Department of Defense policy may be eligible for a waiver.

The shrinkage, stemming from the elimination of "geographic rate protection" outlined in a July 1 Marine Administrative Message, can be as much as hundreds of dollars a month. But Capt. Bradley S. Charlson, deputy disbursing officer for the 1st Force Service Support Group disbursing office, says some Marines might avoid the reduction by filing a waiver to Headquart-ers Marine Corps.

The waiver specifications also are mentioned in the MarAdmin, 239/05.

Servicemembers who fall into this category should check with their S-1 or consolidated admin centers to make sure a waiver is being submitted on their behalf to HQMC, Charlson said.

“The logic behind (the waiver) is that the government saves money by not having to pay for the servicemember to move, as well as allowing the servicemember to not have to relocate their family, etc.,” he said.

“The bottom line is that the services are still permitted to base a member’s BAH rate on other locations besides their current duty station in certain circumstances, but they must apply for a waiver in these cases,” Charlson said.

Under geographic rate protection, servicemembers who changed duty stations within a region — for example, from Marine Corps Recruit Depot San Diego or Marine Corps Air Station Miramar to Camp Pendleton — could retain higher housing allowances even though transferring to a cheaper area.

Now, without a waiver, those transferring Marines face a reduction.

Geographic rate protection expired Monday because BAH rates have climbed so that servicemembers no longer have to pay out-of-pocket expenses for housing, Air Force Col. Virginia Penrod, DoD’s director of military compensation, said in an American Forces Press Service article.

While local realtors have noted in previous Scout articles that high home-mort-gage prices have kept Marines from realizing zero out-of-pocket costs, Charlson says the BAH rates are pegged to rental — not mortgage — rates.

“BAH is intended to cover the costs of renting a home or apartment. Unfortunately or fortunately, depending each person’s situation, in many areas of San Diego County, rental costs have not kept pace with … home prices,” he said.

While home values have skyrocketed in San Diego County and throughout South- ern California, the cost of renting an apartment or townhome has risen much more slowly, he said.

“Since BAH rates are based on a formula taking into account the cost to rent a place to live, Marines in the Camp Pendleton area have seen their BAH rates rise more slowly than what it might cost to purchase a home in the same area,” Charlson said.