There may be some long over due help for members of the military who are faced with the prospect of short selling their homes. But before we get to the really cool stuff… here is some information you should be aware of.
On February 9th 2012, the Department of Justice reached an agreement as part of the $25 Billion Federal-State Mortgage Servicing Agreement, to compensate servicemembers for wrongful foreclosures and/or who were charged interest rates, on their mortgages, in excess of 6% while deployed to a war region where the servicemember was receiving Hostile Fire/Imminent Danger Pay and were stationed away from their home within nine months of the foreclosure.
On 19 December 2003, President Bush signed into law a total overhaul of the Soldiers And Sailors Act of 1940 resulting in a revised version of SCRA “Servicemembers Civil Relief Act” which prohibits foreclosures on servicemembers without court orders on mortgages that were originated before military service began. However, the $25 billion dollar settlement agreement also includes expanded SCRA protections for servicemembers, that reach far beyond the $25 billion dollars settlement. **The Department of Jutice settlement extends this foreclosure protection to all servicemembers, regardless of when their mortgage was secured.
It appears that the $25 billion dollar settlement, reached between the nation’s five largest lenders and the Department of Justice, will also have wide sweeping benefits to active duty military who received or will receive PCS orders.
Here is one of the really cool bonuses that resulted from the $25 billion dollar settlement. The agreement requires all five servicers, Bank of America, JP Morgan Chase, Citi Corp, Ally and Wells Fargo, to provide certain servicemembers who are forced to move because of Permanent Change in Station (PCS) orders… access to loan modifications without going into default or… in the event that they must sell their home at a loss, but are ineligible for funding from the Department of Defense’s Homeowners’ Assistance Program (HAP), the agreement requires all five servicers to provide certain servicemembers, who are forced to move because of (PCS) orders, with short sale agreements and mandatory deficiency waivers.
Many of the details of the agreement have yet to be disclosed, but at the moment, it seems that we are finally going to get some long overdue relief for servicemembers who have loans with Bank of America, JP Morgan Chase, Citi Corp, Ally and Wells Fargo, and who must short sell their homes when they receive PCS orders. The Department of Justice also said that several other banks may be added to the list of banks who agree to settle this law suit. Time will tell.
It has long seemed that the legal system and our government had turned a deaf ear and a blind eye to the brave men and women who defend this great nation. These brave souls were sent, and are still being sent, into harms way and their reward, from the bankers whose freedoms they defend, were to offer little to assist them with their mortgages.
We recently closed a short sale for one of our military families who is a bomb disposal expert. He served multiple tours to the war regions of both Afghanistan and Iraq. His job was to disarm IEDs and then, train the armies of both countries how to do the same. While we were working through his short sale, with one of the five banks noted in the law suit, ever present on his mind was his financial problem at home. Can you imagine… while trying to stay focused on the disarming of explosives in a land far away from his wife and new born baby, the incredible unjust pressure he was subjected to? There is no reason on Earth why he, or any of our brave soldiers, should be forced to endure such mental anguish.
It is long overdue that the banks belly up to the bar and make things right for all Americans, but most importantly, make things right for the brave men and women who defend America, oh yes… and the bankers and wall street giants.
For more information about the Department of Justice $25 billion dollar settlement and to learn if you qualify for enhanced assistance, as prescribed in that settlement, send an eMail to Underwater Mortgage and we’ll point you in the right direction.
**Source: http://www.justice.gov/
By “G-II” Varrato II, Realtor®, Retired USAF Red Horse 820th CES
CDPE, SFR, ePRO 500, ABR, RECS, Mentor
Coldwell Banker Residential Brokerage
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