Security Clearance Denial

Foreclosures and Short Sales

A monograph on “Debt and Home Foreclosures: Their Effect on National Security Clearances” by Sheldon I. Cohen, a prominent Washington D.C. area attorney specializing in national security clearance, was recently posted at his website. Cohen reviewed 62 case decisions by Defense Office of Hearings and Appeals (DOHA) Administrative Judges between 2006 and 2010 involving foreclosures and short sales. He also reviewed 71 DOHA Appeal Board cases involving Guideline F: Financial Considerations. Regarding 22 case decisions that resulted in the granting of security clearances, Cohen stated:

“The common thread in all of these cases is that: (1) applicants were victims of circumstances not of their own doing; (2) they had not been speculators in the housing market who were caught when the bubble burst; (3) they had not succumbed to fraudulent schemes “too good to be true” as a result of their own greed; and (4) they had made good faith efforts to meet their other debts after the loss of their homes by foreclosure or short sale.”

This monograph is probably the only document on the internet that analyzes written case decisions on this subject. A further analysis of the cases reviewed by Cohen might produce some distinctions between outcomes of cases involving foreclosures versus short sales.

Full 37 page study [pdf] – Debt and Home Foreclosures: Their Effect on National Security Clearances

Comment Archive

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    Great article!

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    Sorry if this is off topic. I was trying to reply to Mr. Henderson’s response to me in another posting and could not figure it out.

    Anyway, I had asked about the implementation of the new SF 86 which looks to be coming out in Dec or use in Dec. Unfortunately a couple of months too late for me.

    The new form has only ever convicted, rather than charged with a felony. I am started an excepted federal job with sf86 required. It looks like I will have to fill it out well before Dec and also will have already started the job. I do not think this requires a security clearance, but does require a suitability approval.

    I had a teenage (16) felony charge that was dismissed — it had to do with public sex crime. Despite the fact that I was a victim, I was charged. It is now almost 20 years later and I have had nothing but a couple of speeding tickets. I have led a very responsible life, good jobs, etc.

    Does this new “standard” created by the form, imply that they are not concerned about felony charges longer than 10 years ago? Or they only care about what they find in the scope of the form currently in use?

    I am very concerned that this charge so many years ago will deny me suitability approval. I was a victim at the time, but I am not sure that matters.

    Do you think this will be a problem or is this a new standard?

    Thank you so much. I am not sleeping at night worrying about this.

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    I think you are confusing the version of the SF86 that was submitted for approval in December 2008 and the version that was approved in March 2010.

    The version that was approved in March 2010 asks if you have EVER been charged with a felony offense.

    It also asks if you have EVER been convicted of a crime, sentenced and incarcerated for one year or more.

    It also asks if you have EVER been charged with an offense involving violence, firearms, explosive, drugs or alcohol.

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    soniasoto/scared in VA (NOVA):
    You don’t have anything to be concerned about. Just use the comment section of the “Police Record” question on the form and explain what happened.