Nearly 1,500 additional service members will receive compensation for wrongful foreclosures on their homes, Justice Department officials announced.
The new announcement brings to 2,413 the total number of service members who are eligible to share in a settlement of more than $311 million from five mortgage servicers: JP Morgan Chase, Wells Fargo, Citi, GMAC Mortgage and Bank of America.
Justice officials are wrapping up most of their work identifying the service members who will receive payments as the result of a 3-year-old settlement.
The service members each will receive $125,000, plus any lost equity in their property and interest on that equity, if their mortgage was serviced by Bank of America, Wells Fargo, Citi or GMAC Mortgage.
For those whose mortgages were serviced by JP Morgan Chase, that company will provide either the property free and clear of any debt or the cash equivalent of the full value of the home at the time of sale, and the opportunity to submit a claim for compensation for additional harm suffered.
The payments result from the Servicemembers' Civil Relief Act portion of the 2012 settlement known as the National Mortgage Settlement.
That addressed alleged violations of the SCRA between Jan. 1, 2006, and April 4, 2012, in which the servicers foreclosed on homes without a judicial proceeding, of service members who originated their mortgages before their period of military service; or where servicers obtained a default foreclosure judgment without filing a proper affidavit with the court stating whether the homeowner was in the military.
Officials expect more service members will be identified in the coming months, out of ongoing reviews of Bank of America’s foreclosures related to an earlier settlement.
In February, Justice officials announced that they had initially identified 952 service members who would collectively receive nearly $125 million because their homes were foreclosed on without judicial proceedings.
The process has taken more than three years, according to one official, because the National Mortgage Settlement required a rigorous, detailed file review by independent consultants, which was then subject to further review by the Justice Department.
After those initial determinations, the settlement agreement allowed for the mortgage servicers to raise objections, which were considered before final determinations. Some of the foreclosures date back to 2006.
The 1,461 new service members added to the mix were victims of foreclosures that took place in judicial proceedings without the filing of proper affidavits indicating that they were in the military. When informed that a person is in the military, the court must appoint an attorney to represent that service member, and may delay the foreclosure for a minimum of 90 days.
Notification letters and checks have been going out in waves since late 2014, said Justice Department spokesman Patrick Rodenbush. “The servicers are trying to locate all the service members on their lists so that they can send them their declarations, releases and checks,” he added.
Justice officials and the banks filed a joint motion Sept. 30 in federal district court in Washington, D.C., to extend the term of the SCRA compensation provisions and allow additional time to reach all service members entitled to foreclosure relief, and to complete the ongoing interest-rate reviews.
The settlement also provides compensation for troops who notified their mortgage servicers that they had entered active military service, but were denied the full benefit of the SCRA provision that caps interest rates on pre-service mortgages at 6 percent. Those service members will be identified in the coming months, Justice officials said.
“While this compensation will provide some financial relief to more than 2,400 service members and their families, the fact is no one serving our country in the Armed Forces should ever have to worry about losing their home to an illegal foreclosure,” said Acting Associate Attorney General Stuart F. Delery, in the announcement of payments to service members.
“Through the Servicemembers and Veterans Initiative, the Department of Justice will continue to use every tool at our disposal to protect service members and their families from such unjust actions,” Delery said.
Borrowers should use the following contact information for questions about SCRA payments under the National Mortgage Settlement:
- Bank of America borrowers: Call Rust Consulting Inc. toll-free at 855-793-1370 or write to BAC Home Loans Servicing Settlement Administrator, c/o Rust Consulting Inc., P.O. Box 1948, Faribault, MN 55021-6091.
- Citi borrowers: Call Citi toll-free at 888-326-1166.
- GMAC Mortgage borrowers: Call Rust Consulting Inc. toll-free at 866-708-0915 or write to P.O. Box 3061, Faribault, Minnesota 55021-2661.
- JPMorgan Chase borrowers: Call Chase toll-free at 877-469-0110 or write to P.O. Box 183224, OH-7160/DOJ, Columbus, OH 43219-6009.
- Wells Fargo borrowers: Call the Wells Fargo Home Mortgage Military Customer Service Center toll free at 877-839-2359.
Service members and family members who believe their SCRA rights have been violated may contact an Armed Forces Legal Assistance office.