Military Members Improperly Foreclosed on by Mortgage Companies
Filed under: Home, Family Money, In the News
When a military service member is on active duty — anywhere from Afghanistan to Ft. Benning, Ga. — a number of regulations protect the soldier in the event that anything goes wrong in a family’s personal financial life, including “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,” according to the Department of Justice’s web site.
For 178 of these active duty service members, the key breakdown occurred in mortgage foreclosures. The DOJ said Thursday that it had simultaneously filed and settled lawsuits against Bank of America and Morgan Stanley, setting aside $22 million to compensate the soldiers whose homes were improperly foreclosed on.
The Servicemembers Civil Relief Act states that active duty soldiers may only be foreclosed upon in very extreme cases and must receive court orders before completing the process. The two mortgage servicers, Countrywide Home Loans Servicing (which, after a number of regulatory black eyes, was renamed by BofA) and Saxon Mortgage Services were both accused of knowingly and repeatedly violating the act. This was the largest amount ever recovered for such violations.
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