DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)         ISCR Case No. 15-00383
)
)
Applicant for Security Clearance )
Appearances
For Government: Nicole A. Smith, Esq., Department Counsel
For Applicant: Pro se
______________
Decision
______________
MASON, Paul J., Administrative Judge:
Applicant provided extensive documented information regarding her persistent
efforts over the last two years to resolve an investment property. In June 2016, she
accepted an offer, and submitted a residential contract for sale. Considering all the
evidence of record, she has mitigated the security concerns based on the guideline for
financial considerations. Eligibility for access to classified information is granted. 
Statement of the Case
On July 3, 2012, Applicant signed and certified an Electronic Questionnaires for
Investigations Processing (e-QIP). (Item 3) An investigator from the Office of Personnel
Management (OPM) conducted an interview (PSI) of Applicant on May 28, 2013. (Item
4) On September 29, 2015, the Department of Defense (DOD) issued a Statement of
Reasons (SOR) detailing security concerns under financial considerations (Guideline F).
(Item 1) The action was taken under 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 DOD on September 1, 2006. 
Applicant furnished her notarized answer to the SOR on October 30, 2015. A
copy of the Government’s File of Relevant Material (FORM), the Government’s
evidence in support of the allegations of the SOR, was sent to Applicant on December
14, 2015. In an attachment to the FORM, Applicant was advised she could object to the
information in the FORM or submit additional information in explanation, mitigation, or
extenuation. She received the FORM on December 18, 2015, as established by her
signature and date located at the bottom of the receipt of acceptance of the FORM.
Regarding Item 4 (May 28, 2013 PSI) of the FORM, Applicant was advised that she
could make corrections to the interview summary to improve the exhibit’s clarity and
accuracy. Alternatively, she could object to the entire PSI because it was
unauthenticated by the OPM investigator. She did not object to the PSI. On February
12, 2015, Department Counsel interposed no objection to Applicant’s response to the
FORM. The response generally documented Applicant’s ownership history of the
investment property, and her efforts to unload the property. On August 5, 2016,
Department Counsel forwarded Applicant’s second response to the FORM (residential
contract of sale) without objection. Both responses were entered into the record. The
case was assigned to me on April 11, 2016. 
Findings of Fact
The SOR contains four allegations under the guideline for financial
considerations. Applicant denied a $405 cell phone account (SOR ¶ 1a). She admitted a
mortgage account that is past due in the amount of $28,034, with a balance of
$145,423. She denied a medical account of $115 appearing at SOR ¶ 1.c, and a $264
cell phone account listed at SOR ¶ 1.d. SOR ¶¶ 1.c and 1.d are resolved in Applicant’s
favor because the accounts do not appear in the credit reports presented by the
Government and the Applicant.
Applicant, 33 years old, is single and never married. She has a six-year-old son.
She received some college credits between September 2001 and May 2003. She
obtained a bachelor’s degree in December 2005. She has been employed as a logistics
specialist since March 2006. She has held a security clearance since September 2007.
(Item 3 at 13-25)
In an attachment to her answer to the SOR, and in her response to the FORM,
Applicant explained how she became past due on her mortgage (SOR ¶ 1.b), the
largest debt in the SOR. In March 2009, she purchased a two-bedroom townhouse for
$145,423, as an investment property. The national real estate market then went into a
tailspin the same year, with value of properties falling far below their corresponding
mortgages. The market remained weaker where Applicant’s investment property was
located. From approximately 2012 to 2015, Applicant’s property at ”1319" lost about
45% of its value. The property could not be refinanced and the neighborhood rental
2
market would not cover her monthly mortgage. She could not qualify for a home loan
modification (HLM). The father of Applicant’s son was incarcerated and Applicant could
no longer rely on him for financial support or to make repairs at the investment property.
(Answer to SOR, attachment)
Applicant explained that she was eager to move on from this emotionally
distressing investment. She was young when she purchased the property, but she has
learned from the maintenance costs and related expenses, that it was a bad investment.
As a single mother, she is doing her best to handle her financial obligations by meeting
her daily expenses. (Answer to SOR, attachment; Response to FORM) 
The Government’s July 2013 credit bureau report (CBR) (Item 5) lists five
delinquent debts. Two of those debts are SOR ¶¶ 1.a and 1.b. The only delinquent debt
in the November 2014 CBR is SOR ¶¶ 1.b. The only delinquent debt in the July 2015
CBR (Item 6) is SOR ¶ 1.b. Applicant’s October 2015 CBR identifies SOR ¶¶ 1.a and 1.b
as delinquent. There is no record of missed mortgage payments until July 2013, the date
of the last payment activity. (Items 5, 6, 7; Response to FORM; October 2015 CBR)
In May and July 2014, and December 2015, Applicant submitted a letter to her
SOR ¶ 1.b lender, advising him of her plight. She included financial statements with the
letter. She supplied more than 26 email exchanges (November 2014 to June 2015)
between herself and two short-sale organizations with the objective of short selling,
selling, or renting the investment property. During the application process, she
completed employment questionnaires, personal financial statements and federal tax
transcript requests. (Response to FORM) On June 25, 2016, Applicant and the
purchaser executed a residential contract of sale. The settlement date was scheduled for
September 23, 2016. (Second response to FORM)
Policies
When evaluating an applicant's suitability for a security clearance, the
administrative judge must consider the guidelines in the AG. Each guideline lists
potentially disqualifying conditions and mitigating conditions that are useful 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 sound and prudent judgment. The decision should also include a
careful, thorough evaluation of a number of general factors 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. Decisions include, by
necessity, consideration of the possible risk the applicant may deliberately or
inadvertently fail to protect or safeguard classified information. Such decisions entail a
certain degree of legally permissible extrapolation as to the potential, rather than actual,
risk of compromise of classified information. 
3
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 bears the ultimate burden of persuasion in demonstrating that he warrants a
favorable security clearance decision. Because this case is decided on the administrative
record, credibility assessments of Applicant are limited to her interview summary,
attachment to her answer, and her responses to the FORM.
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. Compulsive
gambling is a concern as it may lead to financial crimes including
espionage. Affluence that cannot be explained by known sources of
income is also a security concern. It may indicate proceeds from financially
profitable criminal acts.
Two pertinent disqualifying conditions are potentially applicable: AG ¶ 19(a)
(inability or unwillingness to satisfy debts); and AG ¶ 19(c) (a history of not meeting
financial obligations). Four credit reports show that Applicant’s most significant debt is
the delinquent mortgage listed at SOR ¶ 1.b. Applicant has been unable to pay the
mortgage since July 2013, when she realized that a down real estate market prevented
her from renting, obtaining an HLM, or selling the parcel. AG ¶¶ 19(a) and 19(c) apply.
Four mitigating conditions are potentially applicable: 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 reliability, trustworthiness,
and good judgment); AG ¶ 20(b) (the conditions that resulted in the financial problem
were largely beyond the person's control and the individual 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) (a good-faith effort to repay overdue creditors or otherwise
resolve debts).
Though the mortgage became delinquent in July 2013, she still owes the debt.
Due to her problems in unloading ownership to the property at “1319," it is unlikely that
4
Applicant will be investing in real estate property in the future. Her efforts to resolve the
property over the last two years warrant some mitigation under AG ¶ 20 (a)
The real estate market collapse in 2008 had a dramatic effect on the entire
country, and lasted longer in some areas than in others. The downturn was unanticipated
and clearly outside of Applicant’s control. Beginning in May 2014, she initiated the
application process for an HLM. Several months later, she executed the appropriate
documentation to sell, short-sell, and rent the property. Over the next one and one-half
years, she provided documentation showing her attempts to sever her ties to the
property. Finally in June 2016, a buyer signed a residential contract for sale of the
property. AG ¶ 20(b) applies. 
Applicant has had no financial counseling. However, she has exercised good
judgment in trying different realty options to resolve her delinquent mortgage. Her largest
debt is about to be resolved, as she has put a contract in place for the sale of the
property. Because of the perseverance shown in resolving the mortgage, I am confident
she will employ the same consistent attention to the cell phone debt that is in collection.
On balance, there are clear indications that her debt delinquencies under being brought
under control. AG ¶ 20(c) applies. 
Whole-Person Concept 
I have examined the evidence under the disqualifying and mitigating conditions of
the financial considerations guideline. I have also weighed the circumstances within the
context of nine variables of the whole-person concept. In evaluating the relevance of an
individual's conduct, the administrative judge should consider the following factors listed
in 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 final security clearance decision must be an overall commonsense judgment
based upon careful consideration of the specific guidelines, each of which is to be
evaluated in the context of the whole person. (AG ¶ 2(c))
Applicant is a 33-year-old single-mother with a six-year-old son. She has been
employed at her current job since March 2006, and has held a security clearance since
September 2007. She received a bachelor’s degree in December 2005. There is no
evidence that Applicant ever missed a mortgage payment before July 2013. Less than a
year later, she demonstrated good judgment in seeking help to rent or sell the property.
Rather than abandon the property altogether, she continued to search for other solutions
to her problem. Finally, she obtained a contract for sale in June 2016. Applicant’s
5
evidence in mitigation is sufficient to mitigate the security concerns based on the
guideline for financial considerations. See AG ¶ 2(a)(1) through AG ¶ 2(a)(9).
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR, as
required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1 (Guideline F): FOR APPLICANT
Subparagraphs 1.a-1.d: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is clearly
consistent with national interest to grant Applicant eligibility for a security clearance.
Eligibility for access to classified information is granted. 
                      
Paul J. Mason
Administrative Judge
6