More than 300 members of the armed forces had their homes illegally foreclosed on in recent years, says a report that was released this week by the Government Accountability Office.
Here is a short version of some of the protections military members are entitled to under the Servicemembers Civil Relief Act, or SCRA:
•Interest rate reduction/cap: A service member cannot be charged more than 6 percent in interest on a mortgage loan if the borrower is on active duty and requests a lower interest rate. The rate is capped for 12 months after the member returns from active duty.
•Foreclosure: The act prohibits foreclosures without a court approval.
•Notice: When filing a foreclosure lawsuit, mortgage servicers are required to notify the court if the homeowner in on active duty.
Often, the mortgage servicers fail to note on their files that the the borrower is a service member, the report says. And even when they do, the guidelines aren’t always followed
Many servicemembers face foreclosure when they are assigned to a new base and can’t sell their homes. Often, they owe more than what their homes are worth. The Federal Housing Finance Agency says that under the new guidelines, homeowners who are transferred to a new base will automatically be approved for a short sale if the home was purchased before June 30 and the loan is owned by Fannie Mae or Freddie Mac
If you know someone in the military, please spread the word!