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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 38 November 2024 F E A T U R E S T O R Y HOW DIGITAL TECHNOLOGY HELPS KEEP THE AMERICAN DREAM ALIVE FOR MILITARY BORROWERS Military borrowers face a number of obstacles on the path to homeownership; however, recent innovations in mortgage technology are making homeownership more accessible to military families. B y J O E Y M C D U F F E E M ost people who have financed a home purchase probably wish the process was less stressful. But if there ever was one type of homebuyer who needed an easier, less complicated loan process, it is someone who actively serves in the U.S. military. Unfortunately, those who have sacrificed the most to protect the American Dream for millions of others often find it more difficult to access their share of it themselves by being able to buy their own home. There are many reasons why this is the case, including rising home prices, and the fact that military personnel relocate frequently. Fortunately, recent innovations in mortgage technology are making homeownership more accessible to military families, and typically, it is independent mortgage bankers and credit unions that specialize in serving military borrowers that are leading the way. Why These Hurdles Exist M ilitary families face multiple chal- lenges when navigating the home- buying process, but the fact that they are regularly transferred to different bases, and sometimes different countries, is by far the largest factor. Frequent relocations are often due to Permanent Change of Station (PCS) orders, which are official instructions issued by the military that mandate the relocation of an active-duty service member and any family members living with them to a new duty station. Because military families can relocate as often as every year, many struggle to maintain good credit, which is a crucial factor in securing home financing—even if they have earned VA benefits. Repeated moves can disrupt the establishment of long-term financial relationships with local banks and credit unions, making it difficult to secure favorable loan terms. It can also lead to gaps in credit activity or the decision to rely on credit or out short- term financing at high rates simply to pay for life's essentials, which can negatively impact a service member's credit. That's not all. Military compensation often includes various allowances, such as those for housing, clothing, and other needs, but these allowances are not always regarded as stable income by lenders. This may create problems when a military mortgage applicant is trying to prove they have reliable income for a loan approval. At the very least, it can lead to higher rates and less favorable loan terms. The Urban Institute recently shed light on some of these challenges in a June 2024 report, "Barriers to Homeownership among Active-Duty Service Members." The report revealed that active-duty service members relocate at a much higher rate than the civilian population, with approximately 36% moving once every year compared to the civilian rate of 8.9%. This frequent relocation was a significant factor behind lower homeownership rates among military personnel, according to the report. In fact, the homeownership rate for active-duty members was just 41%, markedly lower than the general population's rate of 64.5%, the Urban Institute found. Addressing these issues requires providing military borrowers with a mortgage experience that fits their unique J O E Y M C D U F F E E , VP for Blue Sage Solutions, has been dedicated to the development, support, and sales of mortgage origination technologies for more than 25 years. His successful sales, implementation, and problem-solving skills blend a combination of business knowledge and technical acumen to provide the most ideal approach to issues facing lenders daily. McDuffee has worked with a variety of the largest banks and mortgage companies across the country, including Wells Fargo, Citicorp, and JP Morgan Chase, designing, and implementing mortgage origination technology solutions and assisting with transformational process reengineering. Prior to leading sales at Blue Sage Solutions, Joey worked worldwide, as Head of Sales at Wipro Gallagher Solutions, and holding numerous management, technical services, and training roles. Joey has published a number of industry articles, participated in expert roundtables, and has been a speaker and panelist at industry conferences.