The latest data shows the foreclosure rate in military zip codes is up 10 percent from the year before, according to RealtyTrac, an online marketplace for foreclosed homes.
The Capristo family in Berkeley has seen the impact of the mortgage crisis on the military first hand. Army staff sergeant Felipe Capristo answered his call to duty in 2001. He enlisted into the Army Reserve and spent two years on the front lines in Iraq beginning in 2004.
It was his second stint with the military. He spent six years in the Marines from 1978-1984.
"He wanted to do it for his country; he feels a lot of pride working for the Army," Felipe's wife Socorro Capristo said.
Felipe is currently based at Fort Bliss, Texas. Socorro remains at home in Berkeley where she has been unemployed for two years
"I got into trouble when I lost my job and then my husband was called to active duty, but he was moved to a different state," she said.
The couple soon got behind on their mortgage and in June, Aurora Loan Services started foreclosure proceedings.
"I'd say the danger of a military member going into foreclosure is probably quite a bit higher than a civilian," Michael Marken said. Marken is with US Coast Guard Legal Services and provides legal assistance for families of all military branches.
Marken says frequent transfers coupled with low pay can lead to economic uncertainty for military families.
"The civilian sector pays quite a bit higher than enlisted people so when they are called up to active duty, they basically drop in income quite a bit and that would affect their ability to make payments for mortgages," he said.
To make ends meet, the Capristos began renting out part of their home in April and successfully completed a trial modification under the president's "Making Home Affordable" program in the fall.
By the end of the year, Aurora Loan Services offered the family a permanent modification. But five weeks later, the offer was rescinded because Aurora claims the family did not meet the income guidelines.
Aurora then began moving to foreclose on the property.
An attorney with Housing and Economic Rights Advocates fired off a quick response.
"I want to make clear, she is protected by the Service Members Civil Relief Act and there should be no foreclosure activity," Lisa Sitkin said.
The act protects any active military personnel from foreclosure unless the servicer can get a court order.
Aurora has since backed off on foreclosure, but it is refusing to reinstate the original modification offered despite what the family's attorney says is verifiable documentation of their income.
"I have yet to have a case where somebody has in fact been offered in writing a program, and where the servicer has so completely failed to live up to what it actually offered somebody," Sitkin said.
A loan executive who asked not to be named confirmed offers for permanent loan modification are rarely, if ever, withdrawn.
Aurora declined to comment on this case, but instead issued a statement saying it "follows Treasury guidelines" and "makes every effort to prevent foreclosure."
"I was so happy everything was going to work out and all of a sudden I'm back to the same point where I started with nothing," Socorro said.
Aurora has offered an alternative modification outside the Obama program and with much less favorable terms than the original offer. The company has also referred this case to outside legal counsel.
7 On Your Side brought this case to the attention of the U.S. Treasury Department.