There are numerous factors that can prevent you from obtaining a security clearance, and even though years have passed since the housing bubble burst, its effects continue to be felt by some security clearance applicants.

Many applicants and security clearance holders who fell behind on their mortgages or lost their homes to foreclosure or short sales in recent years have received a Statement of Reasons notifying them that their clearance applications have been denied or their clearance revoked. The reason stated in these cases is Guideline F of the

Adjudicative Guidelines for Determining Eligibility for Access to Classified Information: Financial Considerations.

“There was a huge surge in Financial Considerations concerns after the housing and financial crisis hit between 2006 and 2012,” says Catie Young, a security clearance lawyer. “It will continue to be a concern for many until applicants are able to put some years between themselves and their financial crises, and show that they’ve been able to avoid making the same mistakes.”

Here’s why: In the government’s eyes, the inability for an applicant to live within his/her means, pay their debts, and meet their financial obligations could signal “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,” according to the Adjudicative Guidelines.

In situations such as applicants involved in the housing bubble fallout, the government looks to see whether the applicant engaged in a “strategic foreclosure,” or acted reasonably and responsibly when the applicant incurred the debt and defaulted, Young says.

A strategic foreclosure could be viewed unfavorably because these situations often aren’t a case of the applicant being unable to meet their mortgage obligations, but instead a decision to walk away from the mortgage because it has become a poor investment.

“The government considers whether the applicant is now acting reasonably and responsibly, such as making good faith efforts to settle the debt,” Young says, adding that these same factors apply when looking at consumer debt.

The government also looks at how an applicant has acted following the financial challenge. Even if years have passed since you were involved in a foreclosure, you still must disclose that information on your SF-86. However, it doesn’t always mean you will be denied clearance. There are mitigating circumstances.

If the foreclosure happened so long ago or under circumstances that are unlikely to ever happen again and the incident doesn’t call into question your current reliability and trustworthiness, you could still obtain security clearance.

The situation might have been due to circumstances that you couldn’t control, such as a medical emergency or death of a spouse. Those circumstances can be explained and are considered during the investigative process, Young says.

Even if your foreclosure was the result of poor financial planning and money mismanagement, the door is not closed on security clearance, provided you can show that you received counseling for the problem, and/or you can show how the problem is being resolved or is under control.

It is a wise decision to consult an attorney who specializes in security clearance law if you have something in your past that you are concerned could interfere with your ability to obtain clearance. Being forthright with the circumstances makes it possible for your attorney to effectively counsel you on how best to mitigate the situation.