Millions In Military Foreclosure Settlements
By Debbie Gregory.
From 2006 through 2010, more than 300 military servicemembers were served foreclosure notices. As a result, in addition to the stress of serving our country, they had the added stress of possibly losing their homes while they were on active duty.
The Servicemembers Civil Relief Act (SCRA), formerly known as the Soldiers’ and Sailors’ Civil Relief Act (SSCRA), is a federal law that provides protections for military members as they enter active duty. SCRA covers issues such as rental agreements, security deposits, prepaid rent, eviction, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, automobile leases, life insurance, health insurance and income tax payments.
In 2011, the Justice Department settled with BAC Home Loans Servicing LP, a subsidiary of Bank of America Corporation, and Saxon Mortgage Servicing Inc., a subsidiary of Morgan Stanley. After obtaining a settlement to compensate 142 military members for wrongful foreclosures, the Justice Department continued their investigation. Bank of America handed over information regarding additional foreclosures made between mid-2009 and 2010. The result was an additional 155 servicemembers that had been impacted. BOA and Morgan Stanley settled with a payout of $36.8 million. Under the second settlement, Saxon Mortgage Services Inc. is in the process of paying out some $2.5 million to 19 servicemembers whose homes were unlawfully foreclosed upon between 2006 and 2010. Each of the 300+ military families will receive $116,785.
Borrowers receiving payment under this settlement may receive an additional payment under a settlement between Bank of America and federal banking regulators–the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System–if the foreclosure occurred in 2009 or 2010.
Clearly, this is a success story for these servicemembers, but there are potentially hundreds or thousands of additional servicemembers who were also impacted by illegal foreclosures. The Justice Department is overseeing audits of other large mortgage servicers, like Wells Fargo, Citibank and Ally.
If you think you might be covered under this act and would like to have your SCRA case reviewed by the Justice Department, you must first seek the assistance of your military legal assistance office. If that office cannot resolve the complaint, the complaint may be forwarded to the Justice Department, who will review the matter to determine whether action is appropriate.