Banks Busted for Bilking Soldiers

The National Mortgage Settlement to help struggling homeowners, in which $25 billion was negotiated with the five biggest banks as a fine for fraudulent mortgage practices, brings special help to members of the Armed Services:

  • Wrongful foreclosures: Bank of America, Chase, Citi, Wells Fargo, and Ally have agreed to conduct a review, overseen by the Department of Justice’s Civil Rights Division, to determine which service members were foreclosed on in violation of the Servicemembers Civil Relief Act (SCRA) since Jan. 1, 2006. The banks are required to provide any service member who was a victim of a wrongful foreclosure with a payment equal to their lost equity, plus interest, and an additional $116,785.

The compensation for service members is in addition to the $25 billion settlement.

  • Interest Charged in Excess of 6 percent: The banks have agreed to conduct a review, also overseen by the Department of Justice’s Civil Rights Division, to determine whether any service member, from Jan. 1, 2008 to the present, was charged mortgage interest in excess of 6 percent after a request to lower the interest rate. The banks are required to pay a refund to service members, with interest. This compensation to service members is also in addition to the $25 billion settlement.
  • Veterans Housing Benefit Program: $10 million will be paid into the Veterans Housing Benefit Program Fund through which the Department of Veterans Affairs guarantees loans on favorable terms to eligible veterans. Many veterans with VA loans will be eligible for relief provided through the servicers’ $20 billion consumer relief obligations.
  • Foreclosure Protections for Servicemembers in Harm’s Way: The Servicemembers Civil Relief Act prohibits banks from foreclosing on active duty service members without first securing a court order. The settlement extends this protection to all service members, regardless of when their mortgage was secured, who within nine months of the foreclosure received Hostile Fire/Imminent Danger Pay and were stationed away from their home.

If you or anyone you know is a Member of the Armed Services, and may have been victimized by B of A, Chase, Citi, Wells Fargo, or Ally, go to http://www.nationalmortgagesettlement.com, and follow directions.