The Biggest Untold Mortgage Crisis:
Help for Families Facing Military Foreclosures
More and more military families are finding
themselves in the middle of a mortgage
nightmare. Soldiers are returning after several
tours of duty, only to find they are on the
verge of losing their homes. While trying to
rebuild their lives, they face the additional
pressure and stress of a looming foreclosure.
According to one recent study, the number of
foreclosures in military towns are four times
the national average. Why? Because military
families were targeted as customers during the
boom in subprime lending. Their frequent moves,
overseas stints, and low pay meant they were
likely to have weak credit ratings. The initial
low rates and easy terms of these loans made
them more attractive than the traditional route
of taking out a Veterans Administration (VA)
loan. In fact, at the peak of the U.S. subprime
lending, the number of new VA loans fell to
their lowest level in 12 years.
With that in mind, it is not surprising that
a large number of military families are being
caught in the subprime mortgage collapse.
Fortunately, there is some help in the form of
the Service membersī Civil Relief Act (SCRA).
The SCRA was created to protect soldiers and
sailors from losing their homes for nonpayment
of mortgages while they are on active duty and
for 90 days after they return home.
Those who qualify for the SCRA include
members of the Army, Navy, Air Force, Marine
Corps and Coast Guard. Also included are members
of the public health service, commissioned corps
of the National Oceanic and Atmospheric
Administration and National Guard members who
were called to active service during a national
emergency and authorized by the President or
Secretary of Defense for more than 30
consecutive days. In addition, citizens ordered
to report for induction under the Military
Service Act, and those serving with the Allied
Forces are also covered under the bill.
If you are covered under the SCRA, a court
ruling must be made before a foreclosure sale or
seizure can occur to your property. Military
personnel can ask for a court delay and be
issued a 90-day adjournment. If the court denies
the delay request, an attorney must be appointed
to represent the service member in absentia.
If the lender forecloses without a court
order, the sale is invalid. If a foreclosure
sale was conducted lawfully, there is still some
recourse. Foreclosed property cannot be seized
until the service member completes active duty.
In addition, the SCRA grants military personnel
the right to revisit a default foreclosure
judgment that was issued during active duty and
also gives them the right to ask that it be
overturned.
For veterans facing foreclosure, it is
critical they understand the process and take
action. There are two types of foreclosures -
judicial and non-judicial. Judicial procedures
are followed by states that use mortgages as the
security instrument for property loans.
Non-judicial procedures are used by states that
use deeds of trust as the security instrument.
For veterans who live in non-judicial
foreclosure jurisdictions, lenders can foreclose
on a property very quickly and without court
proceedings.
For questions about the SCRA contact the
Judge Advocate General's office at your local
military base or the local Veterans
Administration regional office. |
