ISCR Case 14-05988.h1

Case Headnote

ISCR Case No. 14-05988.h1

grantedMay 4, 2016· Hon. Wilford H. Ross· hearing

Summary

A 41-year-old married defense contractor with a Master's degree and prior military service was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant faced allegations related to two property foreclosures and several delinquent debts.

Specifically, the applicant had a property in State One foreclosed upon in 2012, after attempting a deed in lieu of foreclosure in 2011 due to economic downturn, rental issues, and an overseas move. He also had a second property in State Two foreclosed upon in 2012, following an eviction, an unsuccessful attempt at a deed in lieu of foreclosure (for which he paid $20,000 to the bank's representative), and a denied short sale. Additionally, he owed $14,172 for a repossessed automobile, which he has since paid in full, and $16,245 to a credit union for a personal line of credit, for which he has a payment arrangement. He also owed $19,793 for a second mortgage on the State Two property, for which he has a payment arrangement and has sent certified funds.

The judge found that the applicant made significant efforts to resolve his financial issues, demonstrating good judgment and stability in his current financial situation. The financial difficulties were largely attributed to circumstances beyond his control, including a temporary separation and overseas employment. The applicant's good-faith efforts to repay creditors and resolve debts, coupled with his stable current financial situation, led to the decision to grant his security clearance.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.
The financial issues were largely due to circumstances beyond the applicant's control, including a temporary separation and overseas employment.
The applicant's current financial situation is stable, with evidence of ongoing debt resolution.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)appliedBehavior Happened Long Ago or Infrequently
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedIndications That the Problem Is Under Control
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts

Key Rule Quoted

“The ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept.”

Procedural Posture

SOR issuedFeb 27, 2015
Answer filedMar 23, 2015
Hearing heldOct 20, 2015
Decision dateMay 4, 2016

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Good-faith Efforts to Resolve Debts
Whole-person Concept in Security Clearance Determinations

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant denied that he had a property foreclosed upon in 2012. This property was located in State One, and had been purchased by Applicant and his wife in 2003 when he was working in that state. Because of the economic downturn in 2009, rental issues, and his move to a foreign country, Applicant found it impossible to keep up payments on the property. According to Applicant, he submitted a deed in lieu of foreclosure to the mortgage company in approximately 2011 and, “The property was ultimately sold, for more than was owed on the mortgage.” He received the appropriate cancellation of debt Form 1099-C for this property from the lender. However, he has not received the approximately $12,000 he is owed by the mortgage company.	For Applicant	Mortgage or Home Loan Debt	Denied	—	—	—
1.b	Applicant admitted that he owed $14,172 for a repossessed automobile. He has reached a payment arrangement with this creditor and has paid in full the negotiated amount. $14,172	For Applicant	Auto Loan Debt	Admitted	—	—	—
1.c	Applicant admitted that he owed a credit union $16,245 for a personal line of credit. He reached a payment arrangement with the collection agent for the credit union, and has made payments in accordance with this arrangement, as shown by documentation from his bank. $16,245	For Applicant	Personal Loan Debt	Admitted	—	—	—
1.d	Applicant admitted that he owed $19,793 for the second mortgage on the property discussed under 1.e, below. He reached a payment arrangement with the collection agent for the mortgage company, and submitted documentary evidence that he sent certified funds to this creditor in accordance with their instructions. $19,793	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.e	Applicant admitted that he had a second property foreclosed upon in 2011, though the sale actually occurred in 2012. This property was in State Two, and was purchased by Applicant when working in that state. When Applicant moved from State Two to overseas he attempted to rent the property. The renter refused to pay the rent, and Applicant had to have her evicted. Applicant attempted to negotiate with the mortgage holder (a bank) for a deed in lieu of foreclosure. He went to the extent of paying $20,000 to the bank’s representative to continue that process. Applicant presented evidence of that payment. He also attempted to arrange a short sale, which was not approved by the bank. The bank finally foreclosed. Applicant has received the appropriate cancellation of debt Form 1099-C concerning this property. The bank’s foreclosure practices were subject to an Independent Foreclosure Review. As part of that review Applicant was found “eligible to receive a payment as a result of an agreement between federal banking regulators and . . . Bank in connection with an enforcement action related to deficient mortgage service and foreclosure processes.”	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant denied that he had a property foreclosed upon in 2012. This property was located in State One, and had been purchased by Applicant and his wife in 2003 when he was working in that state. Because of the economic downturn in 2009, rental issues, and his move to a foreign country, Applicant found it impossible to keep up payments on the property. According to Applicant, he submitted a deed in lieu of foreclosure to the mortgage company in approximately 2011 and, “The property was ultimately sold, for more than was owed on the mortgage.” He received the appropriate cancellation of debt Form 1099-C for this property from the lender. However, he has not received the approximately $12,000 he is owed by the mortgage company.

For Applicant

Mortgage or Home Loan Debt

Denied

—

1.b

Applicant admitted that he owed $14,172 for a repossessed automobile. He has reached a payment arrangement with this creditor and has paid in full the negotiated amount.

$14,172

For Applicant

Auto Loan Debt

Admitted

—

1.c

Applicant admitted that he owed a credit union $16,245 for a personal line of credit. He reached a payment arrangement with the collection agent for the credit union, and has made payments in accordance with this arrangement, as shown by documentation from his bank.

$16,245

For Applicant

Personal Loan Debt

Admitted

—

1.d

Applicant admitted that he owed $19,793 for the second mortgage on the property discussed under 1.e, below. He reached a payment arrangement with the collection agent for the mortgage company, and submitted documentary evidence that he sent certified funds to this creditor in accordance with their instructions.

$19,793

For Applicant

Mortgage or Home Loan Debt

Admitted

—

1.e

Applicant admitted that he had a second property foreclosed upon in 2011, though the sale actually occurred in 2012. This property was in State Two, and was purchased by Applicant when working in that state. When Applicant moved from State Two to overseas he attempted to rent the property. The renter refused to pay the rent, and Applicant had to have her evicted. Applicant attempted to negotiate with the mortgage holder (a bank) for a deed in lieu of foreclosure. He went to the extent of paying $20,000 to the bank’s representative to continue that process. Applicant presented evidence of that payment. He also attempted to arrange a short sale, which was not approved by the bank. The bank finally foreclosed. Applicant has received the appropriate cancellation of debt Form 1099-C concerning this property. The bank’s foreclosure practices were subject to an Independent Foreclosure Review. As part of that review Applicant was found “eligible to receive a payment as a result of an agreement between federal banking regulators and . . . Bank in connection with an enforcement action related to deficient mortgage service and foreclosure processes.”

For Applicant

Mortgage or Home Loan Debt

Admitted

—

Loading case…

Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES