Given the unique housing concerns of military members and the current economic times, foreclosures and other financial issues are occurring in high numbers for military families. The law involving foreclosures is rapidly evolving to address these issues and it is important to know what new rights are available.
Based on the recent foreclosure crisis in California, several laws regarding consumer rights have been passed. For example, mortgage companies must contact the defaulting borrower to provide specified information regarding options for avoiding foreclosure, prior to recording a notice of default. California law also requires a 90-day opportunity for homeowners to find alternative options to foreclosure before the company can pursue a Notice of Sale. Furthermore, California now requires a single point of contact for each mortgage, to address issues involving confusion over who to contact regarding the servicing their mortgage.
While many broad, new foreclosure rights have been passed, there are numerous laws that are aimed at addressing the unique needs of service members. These rights are outlined in the Servicemembers Civil Relief Act. Under this law, military members can request a stay, essentially a delay, on any foreclosure proceeding. Judges can grant a stay if they find it to be fair in light of the circumstances facing the service member. Also, court fees are waived for service members who request a stay. Further, an automatic 90-day suspension of foreclosure proceedings exists where an active duty military member cannot be contacted due to deployment. The SCRA also imposes a 6 percent interest limit on most mortgages incurred by military members.
Trying to figure out what to do when facing a foreclosure can be a difficult thing to navigate. First, an attorney is a great resource to help you if in the midst of a foreclosure or feel your past foreclosure was done improperly. An attorney can help you decide whether or not a judicial foreclosure or private, non-judicial foreclosure better suits your situation. There are certain advantages to either process that can help you keep your home or quickly solve your foreclosure problem. Also, there are countless success stories of military members being reimbursed for illegal mortgage practices. For example, military members who have been foreclosed on without notice have been able to recover large settlements from mortgage companies. In 2011, some 6,000 military members were able to settle for 57 million dollars from JPMorgan.
In addition, there are many public programs for loan assistance that can be pursued. Specifically for military members, the Veteran’s Affairs Home Affordable Modification allows for affordable mortgage payments set at a percentage of the individual’s income, instead of traditional measures. There are numerous other federal and state programs that can also be used. On the other hand, consumers should be particularly skeptical of private services aimed at dealing with foreclosures due to the numerous scams posing as foreclosure assistance. These scams typically involve fine print aimed at getting consumers to sign over the deed with the ability to buy it back later. Always carefully read the service agreement and know that loan modifications can never be guaranteed!
While this article is intended to provide only general information, please contact an attorney, or the March legal office for more information. Also, for more information about avoiding foreclosure or government housing programs, the Federal Housing Administration’s Outreach Center can be reached at 1-800-877-8339.