More Wrongful Foreclosures Against Military Members?
More than 700 wrongful foreclosures involving active-duty service members — a violation of federal law — by some of the nation’s largest banks were uncovered in a report this week. The findings are higher than original estimates, The New York Times reports.
The Service Members Civil Relief Act forbids foreclosures on active-duty military personnel without court orders. Banks uncovered the wrongful foreclosures when analyzing mortgages as part of a settlement with federal regulators.
In 2011, reports began to surface that active military personnel members were losing their homes while deployed, which sparked Congressional hearings to further investigate. Several banks discovered violations and settled claims of wrongdoing. For example, JPMorgan in 2011 settled claims that it wrongfully foreclosed on 18 military personnel and overcharged 6,000 military members. Bank of America and Morgan Stanley also settled claims that between 2006 and 2009 they had foreclosed on 178 military members.
But this latest report shows that violations were much more extensive than originally believed once the large lenders further investigated the loans on their books. Some of the largest servicers discovered about 200 military members whose homes were wrongfully foreclosed upon in 2009 and 2010.
The banks have been taking extra steps to ensure military personnel face greater protection in the future. For example, JPMorgan says it has started a “very generous program for military, including awarding homes, forgiving principal, and hiring more than 5,000 veterans,” says Kristin Lemkau, a spokeswoman for the bank. “We have remediated these errors and plan to appropriately compensate anyone whom we made a mistake with.”