Over 700 military members were victims of wrongful foreclosure
We’ve written a few times in the past about the settlement that was recently reached between the country’s largest banks and federal financial regulators. The settlement, as we’ve previously discussed, resulted from an investigation into lending and foreclosure practices by the nation’s most powerful banks that revealed significant wrongdoing. Among other wrongful conduct that was uncovered, there were many cases in which banks were foreclosing on borrowers who were not in default on their loans, in other cases banks were denying loan modifications without cause for borrowers who could have stayed in their homes.
Recently as a part of the multibillion-dollar settlement agreement, banks have been cooperating with federal investigations into the specifics of many of the wrongful foreclosure cases, which has lead to the discovery that many victims of wrongful foreclosure were members of the military. Over 700 members of the military suffered from a foreclosure during the housing crisis even though they were up to date on their payments, according to recent reports.
Members of the military are protected from foreclosures while they are away on active duty assignments under the Servicemembers Civil Relief Act, which requires that banks get a court order before beginning a foreclosure.
These borrowers, along with others who qualify under the specifics of the settlement, will receive payments and other types of remediation from the banks that will help undo some of the damage caused by these wrongful foreclosures. Still, as many Atlanta readers know, the stress and difficulty of dealing with a foreclosure cannot be completely erased by a financial settlement.
Source: DealBook, “Banks Find More Wrongful Foreclosures Among Military Members,” Jessica Silver-Greenberg and Ben Protess, March 3, 2013
More information about mortgage assistance and loan modifications can be found on our Gainesville foreclosure prevention page.