Information about the Servicemembers Civil Relief Act

The following is a guest blog written by James at [email protected]:

At least 178 service members were wrongfully foreclosed on under the Servicemembers Civil Relief Act. Last month, the Justice Department filed lawsuits against a Bank of America subsidiary a Morgan Stanley subsidiary. The two companies settled and agreed to pay at least $22 million to victims of the wrongful foreclosures.

Under the Servicemembers Civil Relief Act a foreclosure, seizure or sale of a service member’s property is not allowed within 90 days of the service member completing his or her service. However, the foreclosure, seizure or sale is made valid with a court order. The two companies that settled, one formerly known as Countrywide Home Loans Servicing and Saxon Mortgage Services, allegedly executed foreclosures on active-duty service members without obtaining court orders.

The former Countrywide entity did not admit breaking the law, but agreed to pay $420 million to about 160 service members who were victims of illegal foreclosures from January 2006 to May 2009. The Housing and Economic Recovery Act of 2008 temporarily extended the 90-day window to nine months. That extension expired at the end of 2010, but the two companies’ wrongdoing allegedly occurred while the extension was in place.

The Justice Department accused Saxon of committing illegal foreclosures on about 18 service members. Like the former Countrywide unit, Saxon did not admit to breaking the law and said it would pay $2.35 million to victims of the wrongful foreclosures that happened from January 2006 to May 2009. Both companies also agreed to recompense victims of subsequent illegal foreclosures from May 2009 to the end of 2010.

Protection against wrongful foreclosures is not the only thing covered in the Servicemember Civil Relief Act. Landlords cannot evict active-duty service members from their primary residence or if the monthly rent is less than $2,400. Income tax deferrals are in place too in the instance that military service affects a service member’s ability to pay taxes.

If you’re on active duty and a bank has foreclosed on your home, contact an attorney. Similarly, if you think that you qualify for recompense under the Justice Department settlement call (800) 896-7743. That’s a hotline number set up by the former Countrywide entity and Saxon. Mailbox 6 directs callers to Countrywide; for Saxon, it’s mailbox 995.