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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)         ISCR Case No. 09-07429
 )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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MASON, Paul J., Administrative Judge:
In April 2006, Applicant purchased a $410,000 condominium he could not afford. His
monthly mortgage payment was approximately $2,400 a month. After his wife was granted
child support (two children) in October 2006, other fees and expenses continued to
increase. He tried unsuccessfully to restructure the mortgages and other fees/expenses.
He stopped paying the mortgages in September 2007 when he realized he could not keep
the mortgages and additional expenses current. The condominium went into foreclosure,
and he believes the house was sold because the lenders have not contacted him.
Applicant’s payment of two of the listed creditors, his willingness to negotiate a payment
plan with the two lenders, and his other evidence in mitigation, is sufficient to find the
financial guideline in his favor. Eligibility for access to classified information is granted. 
  
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Statement of the Case
Applicant submitted his Electronic Questionnaires for Investigations Processing (e-
QIP, GE 1) on May 18, 2009. He was interviewed by an investigator from the Office of
Personnel Management (OPM) on July 8, 2009, and a summary of this interview appears
in GE 2 dated February 23, 2010. Applicant agreed with the investigator’s summary (Id. at
108), and agreed that the summary could be used to determine his security suitability. (Id.
at 142)
On March 31, 2010, DOHA issued a Statement of Reasons (SOR) detailing security
concerns under financial considerations (Guideline F). The action was taken pursuant to
Executive Order 10865, Safeguarding Classified Information within Industry (February 20,
1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel
Security Clearance Review Program (January 2, 1992), as amended (Directive); and the
adjudicative guidelines (AG) implemented by the Department of Defense on September 1,
2006. 
Applicant submitted his answer to the SOR on April 23, 2010. DOHA issued a Notice
of Hearing on June 21, 2010, for a hearing on July 15, 2010. The hearing was held as
scheduled. At the hearing, six exhibits (GE 1 through 6) were admitted in evidence in
support of the Government’s case. Applicant testified and proffered three exhibits (AE
through AE C) that I admitted into evidence without objection. He and his second-line
supervisor testified. He was granted until July 29, 2010, to submit additional evidence
regarding his delinquent financial obligations. No additional information was received.
DOHA received the transcript (Tr.) on July 23, 2010. The record closed on July 27, 2010.
Findings of Fact
The SOR contains four allegations under Guideline F (financial considerations). The
first allegation involves overpaid VA benefits. The second and third allegations contain
delinquent mortgage accounts. The last allegation is a past due credit card. Applicant
admitted all allegations. Applicant is 33 years old, divorced with two children, ages eight
and five. (Tr. 25) He has been employed by a defense contractor as a test engineer since
September 2005. Applicant has been attending a satellite location of a college located in
the midwestern United States. He needs two classes to complete his bachelor’s degree in
electronic systems and technology. 
In April 1996, Applicant entered the United States Navy and was employed as an
electronics technician. He was honorably discharged in October 2005. 
Applicant was separated from his wife in October 2005. He and his wife had joint
custody of the two children. Motivated by a desire “to help my [two] kids out in the long run
 They divorced in December 2008. (GE 1 at 40)1
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and to make some financial growth,” (Tr. 22) he purchased a condominium in April 2006
for $410,000, with a first mortgage of $320,000 (SOR 1.c), and a second mortgage of
approximately $90,000 (SOR 1.b) Although he purchased the property through a real
estate agent, Applicant was not knowledgeable of the costs related to the purchase. (Tr.
22-23) Applicant’s mortgage payment for both mortgages totaled approximately $2,400 a
month. Although he was able to meet the monthly mortgage payment for about 15 or 16
months, (Tr. 36) he realized he should not have purchased the dwelling. (GE 2 at 113)
In October 2006, Applicant’s wife was awarded child support of $408 a month.  In1
September 2007, the condominium fees increased from $400 a month to $700 a month.
(GE 2; Tr. 38) In the same time period, Applicant’s day-care expenses reached $1,100 a
month. (Tr. 39) The monthly mortgage, increased condo fee, child support, day-care, and
overall cost of living, were more than Applicant could manage. He tried to renegotiate or
modify the mortgages, but was unsuccessful. (Tr. 38) He consulted with different realty
agents to sell the property, but was informed that condominiums were the most difficult type
of dwelling to sell. (Tr. 38-39)
Applicant stopped making the $2,400 mortgage payment in September 2007.
Applicant moved out of the property, and it went into foreclosure in March 2008 with
Applicant owing approximately $212,000 on the largest mortgage. He is confident the
property was sold because he has not been receiving notices from either lender to recover
balances. In addition, he has not received a request from a collection agency or a notice
from the Internal Revenue Service (IRS) that he derived income from the sale of the condo.
(Tr. 41) If there is any deficiency on either mortgage after the foreclosure and sale of the
property, Applicant is willing to satisfy the deficiency under some type of repayment plan.
(Tr. 43) In October 2008, and December 2008, Applicant tried unsuccessfully to take out
two loans to pay for both mortgage arrears. Each loan request was denied because of
outstanding loans and other obligations. (Tr. 18; AE C) In the future, Applicant intends to
conduct more long-term research before he decides to purchase another home. (Tr. 47-48)
SOR 1.a, $132, Veterans Administration (VA) military benefit account. Applicant
explained that the VA made a mistake with his educational payment benefits. The VA’s
normal procedure was to deduct any surplus amount from the next benefit distribution, but
they did not have Applicant’s correct address. After being alerted that the payment was
unauthorized, he provided full restitution. (Tr. 33; AE B)
SOR 1.d, $816, credit card. Applicant and his former wife had a joint credit card.
Applicant satisfied this account on April 23, 2010. (AE A)
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With regard to financial counseling, Applicant completed a three-week financial
counseling course to teach the enrollee how to be budget his earnings so he can keep track
of his expenditures. (Tr. 50-51) Applicant has a retirement savings account and a savings
account. (Tr. 51-52) Applicant is current with his child support and other financial
obligations. (Tr. 47-48)
Character Evidence
Applicant’s second-line supervisor has had a security clearance for 22 years. He has
supervised Applicant at least since 2005. He also socializes with him. (Tr. 53) The
supervisor has tremendous trust in Applicant, and, in his most recent evaluation, Applicant
was singularly recognized for his outstanding job performance. (Tr. 54) In all of Applicant’s
assignments, he always gets enthusiastic reviews from the customer for completing his
projects in a timely manner. (Tr. 55)
Applicant has received several medals and awards during his military service. (Tr.
27-29) 
Policies
When evaluating an applicant's suitability for a security clearance, the administrative
judge must consider the AG. Each guideline lists potentially disqualifying conditions and
mitigating conditions, which are required to be used to the extent they apply in evaluating
an applicant's eligibility for access to classified information.
The administrative judge's ultimate goal is to reach a fair and impartial decision that
is based on common sense. The decision should also include a careful, thorough
evaluation of a number of variables known as the "whole-person concept" that brings
together all available, reliable information about the person, past and present, favorable
and unfavorable, in making a decision. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture. Decisions include, by necessity, consideration
of the possible risk the applicant may deliberately or inadvertently fail to safeguard
classified information. Such decisions entail a certain degree of legally permissible
extrapolation about the potential, rather than actual, risk of compromise of classified
information.
Under Directive ¶ E3.l.14., the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.l.l5., the applicant is
responsible for presenting "witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by applicant or proven by Department Counsel . . . ." The applicant
has the ultimate burden of persuasion for obtaining a favorable security decision.
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Analysis
Financial Considerations 
The security concern for financial considerations is set forth in AG ¶ 18:
Failure or inability to live within one's means, satisfy debts, and meet financial
obligations may indicate poor self-control, lack of judgment, or unwillingness
to abide by rules and regulations, all of which can raise questions about an
individual's reliability, trustworthiness and ability to protect classified
information. An individual who is financially overextended is at risk of having
to engage in illegal acts to generate funds.
The Government has the responsibility of presenting sufficient information to support
all allegations of the SOR. Based on the credit reports, Applicant’s interrogatory responses,
and his answers to the SOR, the Government has presented sufficient information to
establish the four allegations in the SOR. AG ¶ 19(a) (inability or unwillingness to satisfy
debts); and AG ¶ 19(c) (a history of not meeting financial obligations), apply.
Four conditions under AG ¶ 20 could potentially mitigate Applicant’s delinquent
indebtedness: AG ¶ 20(a) (the behavior happened so long ago, was so infrequent, or
occurred under such circumstances that it is unlikely to recur and does not cast doubt on
the individual’s current reliability, trustworthiness, or good judgment); AG ¶ 20(b) (the
conditions that resulted in the financial problem were largely beyond the person’s control,
and the person acted responsibly under the circumstances); AG ¶ 20(c) (the person has
received or is receiving counseling for the problem and/or there are clear indications that
the problem is being resolved or is under control); and AG ¶ 20(d) (the individual initiated
a good-faith effort to repay overdue creditors or otherwise resolve debts).
In April 2006, Applicant was separated from his wife and had joint custody of two
children. Rather than spending time to understand the fees related to owning a
condominium, and evaluating how a $2,400 monthly mortgage payment and expenses
would impact his other financial obligations, Applicant purchased the condominium for
$410,000. From October 2006, when his wife was awarded the child support, until he
eventually moved out in March 2008, Applicant encountered several additional reasons,
such as increased condominium fees and day care, why he should not have entered a
contract to purchase the dwelling. Applicant testified credibly about learning from his real
estate folly. I conclude it will not happen again. Applicant receives some mitigation under
AG ¶ 20(a). 
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Applicant initially encountered marital problems when he separated from his wife in
October 2005. Applicant’s purchase of his condominium in April 2006 is not mitigating
under AG ¶ 20(b). However, after discovering he could not meet the additional fees and
child support, he tried unsuccessfully to modify the mortgage and sell the property. In late
2008, he attempted in vain to take out loans to meet the mortgage arrears. Even after
foreclosure of the property in 2008, Applicant has kept his child support and other financial
obligations current. 
The documentation provided by Applicant shows he has satisfied two of the listed
creditors, and unsuccessfully tried to take out loans to repay the other two lenders. Even
though the creditors have not contacted him, he still owes the debt and is willing to
negotiate a reasonable figure for repayment. The satisfaction of two creditors and
willingness to address the other two accounts persuades me to conclude Applicant’s debts
are being resolved within the scope of both AG ¶ 20(c) and 20(d). The amount of mitigation
he receives under the two mitigating conditions falls short of meeting his case under the
financial guideline.
Whole-Person Concept 
In evaluating Applicant’s security clearance worthiness, I have examined the
evidence under the disqualifying and mitigating conditions. I have also weighed the
circumstances within the context of nine variables known as the whole-person concept. In
evaluating the relevance of an individual's conduct, the administrative judge should
consider the following factors:
AG ¶ 2(a) (1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual's age and maturity at the time of the conduct; (5) the extent to
which the participation was voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation for
the conduct; (8) the potential for pressure, coercion, exploitation, or duress;
and, (9) the likelihood of continuation or recurrence.
The outcome of this case ultimately weighs in Applicant’s favor under the whole-
person concept based on his decision not to immediately walk away from his property fter
realizing he could not pay the overall increased costs. Though he tried to work out a
reduced mortgage and sale of the property, the child support, increased condominium fee,
and day-care, were too much for him to manage. 
Though Applicant should never have purchased the property in April 2006, he
attempted to modify the increased expense by reducing the mortgage or selling the
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property. The attempts at modification or sale, while keeping his other bills and his child
support current, demonstrate responsible action by Applicant under the circumstances. 
Applicant is 47 years old. He served for 10 years in the United States Navy,
receiving several medals and an honorable discharge. He has earned a tremendous
amount of respect by his second-line supervisor and his customers over the past five years.
Considering the entire record, I conclude that Applicant warrants a security clearance. 
Formal Findings
Paragraph 1 (Guideline F): FOR APPLICANT
Subparagraph 1.a For Applicant
Subparagraph 1.b For Applicant
Subparagraph 1.c For Applicant
Subparagraph 1.d For Applicant
Conclusion
In light of all the circumstances presented by the record in this case, it is clearly
consistent with the national interest to grant Applicant access to classified information.
Eligibility for access to classified information is granted.
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Paul J. Mason
Administrative Judge