The Consumer Financial Protection Bureau and the Justice Department issued letters to mortgage servicers and housing providers reminding them that military and veteran families who are leaving pandemic-related forbearance plans or renters leaving moratoriums have extra protections under law. They want to ensure that military families and vets are not illegally evicted or foreclosed on.
Service members and vets have extra protections under the Servicemembers Civil Relief Act. That law protects certain servicemembers’ mortgages from being foreclosed upon or the eviction of military families from their homes without court orders. It also allows military families to terminate residential leases early and without penalty when receiving military orders.
The letters from CFPB and DOJ come in response to growing reports of complaints from military families and veterans who have alleged numerous mortgage servicing violations, including inaccurate credit reporting, misleading communications to borrowers, and required lump sum payments for reinstating their mortgage loans.
“The illegal foreclosures of military families in the last crisis was one of the financial industry’s worst failures,” Rohit Chopra, CFPB director, wrote in a statement. A decade ago, mortgage servicers were accused of not following additional protections for military servicemembers and vets, which resulted in numerous settlements with regulators, including a $186 million settlement between the DOJ and some of the nation’s largest mortgage servicers. “The CFPB will be closely watching mortgage servicers and will hold them accountable for illegal tactics perpetuated against military families,” Chopra says.
About 1.25 million borrowers—many of whom are military borrowers—remain in forbearance programs that will expire at the end of the year, CFPB says in a news release.
“The Department of Justice takes seriously its responsibility to safeguard the rights of servicemembers and veterans,” says Kristen Clarke, assistant attorney. “While servicemembers carry the great burdens of this nation, they should not have to worry that their sacrifices will result in economic harm to their families. Mortgage servicers and landlords must ensure that they are in full compliance with federal laws intended to protect servicemembers and their families during military service.”
National Association of REALTORS®
Reprinted with permission
