Back in 2003, President Bush signed The Servicemember’s Civil Relief Act (SCRA), which expanded and improved the former Soldiers’ and Sailors’ Civil Relief Act (SSCRA).
Under the new terms, banks are not allowed to charge an active duty service member more than 6% on debt incurred prior to active duty, nor are they allowed to foreclose without authorization from a judge. In addition foreclosure can only happen after a hearing, at which the service member must be represented.
However, the law didn’t stop the banks from charging high interest rates or from foreclosing.
One service member who lost his home is James Hurley. He returned from Iraq in December 2005 to find that his home had illegally foreclosed upon, and sold two months earlier. Now, after more than 5 years and two court cases, he will be compensated. But of course, he doesn’t get his home back. The current owners don’t wish to sell.
According to an article in the June/July issue of VFW Magazine, 23 similar cases are now under review by the Justice Department. And, as a result of ongoing investigations, the Justice Department is considering more lawsuits against lenders. Most are for over- charging of interest and illegal foreclosure.
Now that high interest rates and illegal foreclosures have been exposed, banks are taking steps to make amends.
In March 2011, JPMorgan Chase began mailing $2.4 million in interest refunds to 4,500 military families. They say they are also working to reverse improperly handled foreclosures. But of course, if the homes have already been re-sold, those military men and women won’t be getting their own homes back.
Bank of America has joined in, saying they will reduce active duty service members mortgage loans to “as low as 100% of the current market value,” and will reduce interest rates to 4%.
Chase is also reducing interest rates to 4%, and has promised to donate 1,000 homes to service members and veterans. The article didn’t mention how the recipients would be chosen.
It’s a shame that public scrutiny and legal action was required in order to force banks to comply with laws that protect our military members. After all, without our veterans, no one would be free to purchase homes or use credit cards.
For an over-view of the protections offered by the SCRA, visit Military.Com. (http://www.military.com/benefits/legal-matters/scra/overview).
If you’re a veteran and need assistance, visit the Pentagon’s Homeowners Assistance Program at hap.usace.army.mil. If you’re an Iraq or Afghanistan vet, check out www.usacares.org.
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