Consisting of the transcript (Tr.), Government exhibits (GE) 1-3, and Applicant exhibits (AE) A-C. AE C was1
timely received post hearing.
DOHA acted under Executive Order 10865, Safeguarding Classified Information within Industry (February2
20, 1960), as amended; Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program  (January 2, 1992), as amended (Directive), and the adjudicative guidelines (AG)
effective within the DoD on 1 September 2006. 
1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-01351
)
Applicant for Security Clearance )
Appearances
For Government: Raashid S. Williams, Esquire, Department Counsel
Richard A. Stevens, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
METZ, John Grattan, Jr., Administrative Judge:
Based on the record in this case,  Applicant’s clearance is granted.1
On 5 April 2011, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline
F, Financial Considerations.  Applicant timely answered the SOR, requesting a hearing.2
DOHA assigned the case to me 20 May 2011, and I convened a hearing 28 June 2011.
DOHA received the transcript (Tr.) 6 July 2011.
 
2
Findings of Fact
Applicant admitted the SOR allegations. He is a 41-year-old electrician employed
by a defense contractor since May 2001. He has not previously held an industrial
security clearance, but had one from 1989 to 1995 when he served in the military.
The SOR alleges, Government exhibits confirm, and Applicant admits,
delinquent first and second mortgages that were $30,000 past due on loan amounts of
$350,000. The property secured by the mortgages has since been foreclosed upon, and
the status of the foreclosure is unknown.
Applicant and his first wife were married in October 1990, separated in July 2001,
and divorced in February 2005. They had three children together, for whom they shared
legal custody. Applicant remarried in April 2005, a woman with two children from her
previous marriage.
When Applicant remarried, he and his new wife were living in separate rental
houses. In May 2005, they bought a 2,800 square foot house with 3/4 bedrooms to live
in, recognizing that the house would be large enough for all the children for the time
being, but they would eventually outgrow it. The house was secured by a first mortgage
of $317,000 and a second mortgage of $37,000. The monthly mortgage totaled about
$2,900, a figure they had no trouble meeting.
In about May 2008, Applicant and his wife had the opportunity to buy a new
house that was under construction in a desirable neighborhood, at what they considered
to be a good price. Thinking they would have no problem selling their current house,
they bought the new house. However, this was at the beginning of the decline in local
housing prices and they were unable to sell the house. Eventually, they tried to rent
their house, and in January 2010 rented the house to a military member at a rate that
did not cover their entire mortgage, but was a shortfall they were able to cover.
The lease Applicant entered into contained a standard “military clause,” that
permits a military member to break the lease without penalty if the military member
receives orders out of the area. In April 2010, the military member was ordered to Iraq
and broke the lease. Applicant was unable to find another renter, and his efforts to
make alternate arrangements with the lenders (AE A, C; Tr. 40) provided inadequate
relief. He fell behind on the mortgage payments and eventually the house went into
foreclosure. He reported these details on his November 2010 clearance application (GE
1).
Applicant does not know the status of the foreclosure, and has been unable to
obtain the information from the lender. He requested copies of the loan modification
documents (AE C), but since the house was in foreclosure, the lender would not commit
to providing the documents. Applicant has about $40,000 in a 401k account, and is
otherwise current on family expenses. His work and character references consider him
honest and trustworthy (AE C).
See, Department of the Navy v. Egan, 484 U.S. 518 (1988).3
¶ 19.(a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations;4
¶ 20 (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that5
it is  unlikely to recur . . . 
3
Policies
The adjudicative guidelines (AG) list factors for evaluating a person’s suitability
for access to classified information. Administrative judges must assess disqualifying and
mitigating conditions under each issue fairly raised by the facts and situation presented.
Each decision must also reflect a fair, impartial, and commonsense consideration of the
factors listed in AG ¶ 2(a). Any one disqualifying or mitigating condition is not, by itself,
conclusive. However, specific adjudicative guidelines should be followed where a case
can be measured against them, as they represent policy guidance governing access to
classified information. Considering the SOR allegations and the evidence as a whole,
the relevant adjudicative guideline is Guideline F (Financial Considerations).
Security clearance decisions resolve whether it is clearly consistent with the
national interest to grant or continue an applicant’s security clearance. The Government
must prove, by substantial evidence, controverted facts alleged in the SOR. If it does,
the burden shifts to applicant to refute, extenuate, or mitigate the Government’s case.
Because no one has a right to a security clearance, the applicant bears a heavy burden
of persuasion.
Persons with access to classified information enter into a fiduciary relationship
with the Government based on trust and confidence. Therefore, the Government has a
compelling interest in ensuring each applicant possesses the requisite judgement,
reliability, and trustworthiness of those who must protect national interests as their own.
The “clearly consistent with the national interest” standard compels resolution of any
reasonable doubt about an applicant’s suitability for access in favor of the government.3
Analysis
The Government established a case for disqualification under Guideline F, but
Applicant mitigated the security concerns. Applicant and his wife experienced financial
problems when they were unable to sell their first house and the tenant they obtained
broke the lease after only four months. They could not find another tenant or get other
relief from their lender and the house was foreclosed upon.  However, it appears that4
the financial fallout from this situation has been limited to the house and the two
mortgages.
Applicant meets significant mitigating factors for financial considerations. While
his financial difficulties are recent, they were limited to the one house, and the
circumstances under which they occurred are unlikely to recur.  Applicant and his wife5
¶ 20.(b) the conditions that resulted in the financial problem were largely beyond the person’s control . . . and6
the individual acted responsibly under the circumstances;
¶ 20.(c) the person has received or is receiving counseling for the problem and there are clear indications7
that the problem is being resolved or is under control;
¶ 20.(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.8
4
proceeded reasonably in buying a larger home for their family. Losing their tenant was a
circumstance beyond their control, and Applicant acted responsibly in addressing his
debts under the circumstances.  Although the one house was foreclosed upon, he6
remained current on his other expenses. While there is no evidence that he sought
credit counseling, it does not otherwise appear that Applicant and his wife were living
beyond their means in any regard.  The only unknowns in the case are whether there7
will be a deficiency when the house is sold at foreclosure and whether the lender will
forgive the debt, resulting in income to Applicant that may be taxable. However, given
that Applicant has substantial retirement savings, it appears that he will be able to
resolve any remaining liability on his first house.  Finally, given Applicant’s favorable8
work and character references, his otherwise clean financial record, and the peculiar
convergence of events that lead to the financial problems, the record does not suggest
that Applicant’s financial problems will recur. I conclude Guideline F for Applicant.
Formal Findings
Paragraph 1. Guideline F: FOR APPLICANT
Subparagraphs a-b: For Applicant
Conclusion
In view of the circumstances presented by the record in this case, it is clearly
consistent with the national interest to grant or continue a security clearance for
Applicant. Clearance granted.   
                                              
                                             
JOHN GRATTAN METZ, JR
Administrative Judge