Foreclosed Vets get big settlementby Tim Manni
Perhaps the largest payout of the recently announced foreclosure-abuse settlement between 49 states and five of the nation’s largest banks will go to our nation’s servicemembers who were wrongfully foreclosed on. The settlement also lays out future protections for servicemembers.
According to the Department of Justice, here’s how the compensation and future protections have been structured (taken from DOJ press release). All compensation is in addition to the $25 billion robo settlement:
- JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc. (formerly GMAC) have agreed to conduct a full review, overseen by the Department of Justice’s Civil Rights Division, to determine whether any servicemembers were foreclosed on in violation of the Servicemembers Civil Relief Act (SCRA) since Jan.1, 2006.
- Wells Fargo, Citigroup and Ally will be required to provide any servicemember who was a victim of a wrongful foreclosure a minimum payment of $116,785 plus the servicemember’s lost equity and interest for violating the SCRA. The servicemember’s payment could be higher as a result of the review conducted by the banking regulators.
- To ensure consistency with an earlier private settlement, JP Morgan Chase will provide any servicemember who was a victim of a wrongful foreclosure either his or her home free and clear of any debt or the cash equivalent of the full value of the home at the time of sale. In addition, service members will receive compensation for any additional harm suffered. All compensation for servicemembers wrongfully foreclosed on is in addition to the $25 billion settlement amount.
- In addition, Citigroup, Wells Fargo and Ally have also agreed to conduct a thorough review, overseen by the Department of Justice’s Civil Rights Division, to determine whether any servicemember, from January 1, 2008 to the present, was charged interest in excess of 6% on his or her mortgage, after a valid request to lower the interest rate, in violation of the SCRA.
- Servicers will be required to provide any servicemember who was wrongfully charged interest in excess of 6% with a payment equal to a refund, with interest, of any amount charged in excess of 6% plus triple the amount refunded or $500, whichever is larger. JP Morgan Chase had already compensated servicemembers charged interest in excess of 6% on their mortgage through the earlier private settlement.
Polyana da Costa of Bankrate.com said it best: “Now that is what I call a settlement. It’s certainly much better than the mere $2,000 that nonmilitary borrowers may receive under the $25 billion federal-state mortgage settlement.”
If you’re a servicemember and believe that your lender or servicer violated your SCRA rights, you should contact your local Armed Forces Legal Assistance office. For help finding legal assistance, log onto http://legalassistance.law.af.mil and click on the legal services locator. You can also contact the DOJ at (800) 896-7743.