There was a story not very long ago that reported that members of the military were losing their homes to unfair foreclosures. If you were one of the service members affected by this or if you know a military member who had their home foreclosed on unfairly, there is some great news.
As a result of the lawsuits filed over this matter, four of the main lenders in this debacle have vowed to make amends with the military service members who were unduly foreclosed upon and those who were denied a reduction in their interest rates despite the law that is designed to protect active duty military personnel from mortgage and credit abuses while they are deployed. The four major banks that were involved in this were Wells Fargo, Citigroup, Ally Financial and JPMorgan Chase. In order to make amends for these abuses, the four lenders have agreed on a comprehensive settlement which includes the following terms:
- Ally Financial, Wells Fargo and Citigroup will have to pay any service member that had a wrongful foreclosure at least $116,785 in addition to any interest and lost equity that occurred on their home. In some cases, the banking regulators may require them to pay out more depending on each individual case.
- JPMorgan Chase has already compensated some of the military service members who were affected by wrongful foreclosures and those who were denied lower interest rates due to a previous settlement. Chase will also provide these service members either the full cash equivalent of their home at the time when they were wrongfully foreclosed or give them their home free and clear if they are still living in it. In addition to that, many of the service members affected by Chase’s violations will receive additional compensation for additional harm that they may have suffered.
According to Tom Perez, the assistant attorney general for the Justice Department’s civil rights division, the Servicemembers Civil Relief Act is designed to reduce the burden of consumer debt obligations for our active duty military personnel so they can devote their full attention to their military responsibilities instead of worrying about the adverse financial consequences to their families. It is supposed to prevent foreclosure and other consequences so these wrongful foreclosures and resistance to reducing their mortgage interest rates are violating the law. The settlement in the recent class action lawsuit expands the protection by covering troops who are deployed regardless of when they took out their mortgage (before or after enlisting in the military) and it also provides relief for military members’ families who have underwater mortgages and are also relocating due to new military assignments.
If you are unsure if you qualify for mortgage relief help and you are a service member, you can find more information at www.servicemembers.gov. You can also find information by contacting your Armed Forces Legal Assistance office or call the United States Justice Department at 800-896-7743.