1 
       DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
 ) ISCR Case No. 15-05321 
)
)
Applicant for Security Clearance ) 
Appearances 
For Government: Aubrey De Angelis, Esq., Department Counsel 
For Applicant: Pro se 
October 31, 2016 
______________ 
Decision 
______________ 
GOLDSTEIN, Jennifer I., Administrative Judge: 
Applicant defaulted on a mortgage he co-signed for his parents. His decision to 
co-sign the loan happened ten years ago and occurred under circumstances that are 
unlikely to recur. His past behavior does not cast doubt on his current reliability, 
trustworthiness, or good judgment. Eligibility for access to classified information is 
granted. 
Statement of the Case 
On May 27, 2014, Applicant submitted an e-QIP. On March 15, 2016, the 
Department of Defense issued a Statement of Reasons (SOR) to Applicant detailing 
security concerns under Guideline F, Financial Considerations. The action was taken 
under Executive Order (EO) 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) effective September 1, 2006.  
 
2 
 
Applicant answered the SOR on April 20, 2016 (Answer), and requested a 
hearing before an administrative judge. The case was assigned to me on May 31, 2016. 
The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on 
June 22, 2016, scheduling the hearing for July 25, 2016. The hearing was convened as 
scheduled. The Government offered Exhibits (GE) 1 through 4, which were admitted 
without objection. Applicant offered Exhibits (AE) A through C, which were admitted 
without objection. Applicant testified on his own behalf. The record then closed. DOHA 
received the transcript of the hearing (Tr.) on August 2, 2016.  
 
Findings of Fact 
 
Applicant is 35 years old. He has been employed with a Government contractor 
for 12 years. He has held a security clearance that entire time and has had no security 
violations. He is not married and has no children. 
 
The Government alleged that Applicant is ineligible for a clearance because he 
made financial decisions that indicate poor self-control, lack of judgment, or 
unwillingness to abide by rules and regulations, all of which raise questions about his 
reliability, trustworthiness and ability to protect classified information. The SOR 
identified two debts of approximately $287,000 each. Applicant denied both allegations. 
Both of the alleged debts were listed on credit reports dated June 6, 2014; May 27, 
2015; and May 23, 2016. (Answer; GE 2; GE 3; GE 4.) 
 
 Applicant testified that, in approximately 2003, his father was laid off from his job. 
In 2005, while still unemployed, his father decided to move to a home where the cost of 
living would be more affordable. Due to his father’s unemployment, Applicant’s father 
and mother asked Applicant to co-sign a mortgage with them to purchase a house in 
their new city. The house cost $320,000. Applicant was 25 years old at that time, and 
was not financially savvy. He did not understand that co-signing the loan could make 
him legally liable for the entirety of the loan. His parents promised to sell their previous 
home in the more expensive city, and his father was actively looking for work in their 
new city. Applicant agreed to co-sign a single mortgage of approximately $287,000. His 
parents put down approximately $50,000 toward costs, fees, and the mortgage. (Tr. 16-
25.) 
 
 Applicant’s parents successfully made payments on the mortgage until 
approximately 2010. His father had found work in approximately 2006, but was again 
laid off in 2010. They could no longer afford the mortgage. Applicant was not aware that 
they defaulted on the loan until his parents had missed approximately seven payments. 
He did not get notices from the loan servicer because they were mailed directly to his 
parents. (Tr. 25-27.) Applicant’s mother told him not to worry about it because she 
would either short-sell the property or the loan would be satisfied through foreclosure. 
The value of the home, which was approximately $300,000 when they purchased it, had 
declined by $200,000. Applicant trusted his mother and father to handle the situation 
independently and did not intervene. (Tr. 16-39.)  
 
 
3 
 
 Tracing the history of the loan is difficult, but it is clear that Applicant co-signed 
only one $287,000 secured loan. Applicant’s credit reports show a home mortgage of 
$287,858 opened with loan servicer 1, in May 2006. It first became delinquent in 
February 2010. It was a thirty-year loan. (GE 4 at page 5 tradeline 11.) The same loan 
was listed with loan servicer 2 (GE 4 at page 7 tradeline 19); and loan servicer 3 (GE 4 
at page 6 tradeline 14.) Eventually it was transferred to loan servicer 4, who reported it 
using the same account number as that identified on the entry for loan servicer 1 (GE 3; 
at page 1.) That is the debt alleged in SOR subparagraph 1.a.  
 
 According to court documents, this loan was backed by a different financial 
institution (Investor). Investor was the trustee for the certificate holders which backed 
the loan made to Applicant that was serviced by the various lenders. (AE C.) Investor is 
the creditor identified in SOR subparagraph 1.b. When Applicant’s parents defaulted on 
the home mortgage, Investor (not the loan servicer) filed suit to enable it to repossess 
the property. An Order for Default Judgment of Foreclosure and Order of Sale was 
entered against Applicant and his parents on March 21, 2014, in favor of Investor by the 
court. The amount of the judgment was for $287,000, but the Order noted, “the sums in 
which the Borrowers are indebted to Plaintiff as indicated in ¶ 2 above in the judgment 
are for the purposes of foreclosure only and from which a Writ of Execution will issue. 
This judgment is not intended to be a monetary judgment against the Borrowers.” (AE 
C.) As a result, this judgment was satisfied when the property was foreclosed upon as 
set out in the order and perfected through the foreclosure. (AE C.) 
 
 Applicant testified he is no longer helping his parents financially and he will not 
co-sign another loan. (Tr. 38-45.) He uses a budget to manage his finances. He has 
$151,000 in a 401K savings account and has no problem meeting his monthly 
expenses. His July 2016 credit report, reflects that his credit card accounts, student 
loans, and car payment are current. That report identified no additional delinquencies. 
(AE A.)  
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines (AG). In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which are to be used in evaluating an 
applicant’s eligibility for access to classified information. 
 
These guidelines are not inflexible rules of law. Instead, recognizing the 
complexities of human behavior, administrative judges apply the guidelines in 
conjunction with the factors listed in AG ¶ 2(a) describing the adjudicative process. The 
administrative judge’s overarching adjudicative goal is a fair, impartial, and 
commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious 
scrutiny of a number of variables known as the “whole-person concept.” The 
administrative judge must consider all available, reliable information about the person, 
past and present, favorable and unfavorable, in making a decision. 
 
 
4 
 
The protection of the national security is the paramount consideration. AG ¶ 2(b) 
requires that “[a]ny doubt concerning personnel being considered for access to 
classified information will be resolved in favor of the national security.” In reaching this 
decision, I have drawn only those conclusions that are reasonable, logical and based on 
the evidence contained in the record. Likewise, I have avoided drawing inferences 
grounded on mere speculation or conjecture. 
 
Under Directive ¶ E3.1.14, the government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is 
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by the applicant or proven by Department Counsel.” The 
applicant has the ultimate burden of persuasion to obtain a favorable clearance 
decision.  
 
 A person who seeks access to classified information enters into a fiduciary 
relationship with the government predicated upon trust and confidence. This relationship 
transcends normal duty hours and endures throughout off-duty hours. The government 
reposes a high degree of trust and confidence in individuals to whom it grants access to 
classified information. 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 as to 
potential, rather than actual, risk of compromise of classified information. 
 
Section 7 of EO 10865 provides that adverse decisions shall be “in terms of the 
national interest and shall in no sense be a determination as to the loyalty of the 
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites 
for access to classified or sensitive information).   
 
Analysis 
 
Guideline F, Financial Considerations 
 
The security concern for Financial Considerations is set out 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.  
 
 
5 
 
The guideline notes several conditions that could raise security concerns under 
AG ¶ 19. Two are potentially applicable in this case:   
 
 (a) inability or unwillingness to satisfy debts; and 
 
 (c) a history of not meeting financial obligations. 
 
 In 2010 Applicant accumulated a significant amount of delinquent debt when his 
parents defaulted on the mortgage that he co-signed for them. His actions 
demonstrated both a history of not addressing his debt and an unwillingness to do so. 
The evidence is sufficient to raise the above disqualifying conditions. 
  
  One Financial Considerations mitigating condition under AG ¶ 20 is potentially 
applicable:  
 
(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. 
 
 The evidence shows that Applicant’s mortgage was resolved through 
foreclosure. This debt was incurred when he was 25, and naive about the ramifications 
of co-signing a loan for his parents. He trusted his mother and father to resolve the debt 
when he learned it was delinquent; and he did not follow through to make sure their 
decisions were responsible and in his best financial interest. However, he has learned 
from this experience and is unlikely to co-sign another loan in the future. His most 
recent credit report reflects that all of his other accounts are in good standing. He is now 
more mature and is saving for his future. His behavior happened so long ago, and 
occurred under such circumstances, that it is unlikely to recur and does not cast doubt 
on his current reliability, trustworthiness, or good judgment. AG ¶ 20(a) provides 
mitigation. 
 
Whole-Person Concept 
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s eligibility for a security clearance by considering the totality of the applicant’s 
conduct and all relevant circumstances. The administrative judge should consider the 
nine adjudicative process factors listed at 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 participation is 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. 
 
6 
 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security 
clearance must be an overall commonsense judgment based upon careful consideration 
of the guidelines and the whole-person concept.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
relevant facts and circumstances surrounding this case. I have incorporated my 
comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 
2(a) were addressed under that guideline, but some warrant additional comment. 
Applicant exercised questionable judgment in the past when he co-signed the mortgage 
for his parents and then did not monitor the loan to insure his parents fulfilled their 
promise to him to pay the loan. However, the debt is resolved through foreclosure and 
Applicant has matured. He will not co-sign another loan for his family. He now operates 
using a budget and all of his other debts are in good standing. Overall, the record 
evidence leaves me without questions or doubts as to Applicant’s eligibility and 
suitability for a security clearance. For all these reasons, I conclude Applicant has 
mitigated Financial Considerations security concerns.  
 
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 
 
  Subparagraph 1.a:   For Applicant 
Subparagraph 1.b:   For Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant or continue Applicant’s eligibility for 
a security clearance. Eligibility for access to classified information is granted. 
                                                
 
 
________________________ 
Jennifer I. Goldstein 
Administrative Judge