Do you hold a government position, are you in the U.S. Military or are you a Federal contractor? These and many other jobs often require a security clearance. If you are considering short sale or foreclosure, proceed with caution or your position may be at risk.
If you currently hold a security clearance, such as DOD “Confidential”, “Secret” or “Top Secret”,and work for the Federal Government, at Miramar or Camp Pendleton , you may already know a credit check is one of the standard procedures to obtain your clearance. A short sale, foreclosure, or deed in lieu of foreclosure, as well as missed mortgage payments, can all affect whether or not you retain your clearance.
“Why should I care?” you might ask, especially if you are not in the military. According to the Washington Post, over 850,000 Americans hold security clearances and one-third are NOT employed by the government. Also, those who hold security clearances are among the top wage earners in the United States. You don’t have to be a technocrat or engineer to require a security clearance. If you are a janitor, fire fighter, police officer, or administrator in a secure facility, for example, at an international airport, you may need a clearance.
Before proceeding with a short sale, I ask my potential sellers to check with their current or FUTURE security or personnel officer to find out how a short sale may affect their position. Even though many have received the “OK for short sale, but not foreclosure or deed-in-lieu of foreclosure”, a few have not. I recently had an airman from Fort Walton Beach Florida inquire about short sale. He told me his new position would be overseas with an international military group, representing the United States. I asked that he check with his security officer before proceeding with a short sale. The answer? “No way.” He would have lost his position if he had gone forward. Instead, he is going to rent out his property. (By the way, that potential seller had interviewed two agents, and I was the only one who mentioned this possibility.)
How about another “at risk” scenario? I had a former short sale seller apply for an overseas position in the Middle East as a U.S. contractor after short sale. All applications, interviews, etc., had been completed except for the credit check. The position was denied. Why? Short sale. I don’t want to frighten anyone away from short sale who needs a security clearance, as these are the less frequent outcomes. But, I want to put out a strong warning, consult your security officer before proceeding.