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Military Verification Blog

Legislation Proposed to Extend Active Duty Foreclosure Protection

Jun 12 2014
By: Roy L. Kaufmann
Categories: Legislative Developments

extend foreclosure protectionsThe Servicemembers Civil Relief Act (“SCRA”) contains protections against foreclosure.  When enacted, the SCRA provided that those protections would apply for 90 days after the termination of active duty.  There have been several amendments to the SCRA which altered that time period from 90 days to 9 months and the amendment currently in force ensures those protections for a full year.  The amendment currently in force is set to expire on December 31, 2014 which would revert the time period to its original 90 days.

Over the Memorial Day weekend, U.S. Senator Sheldon Whitehouse introduced legislation to permanently extend active duty foreclosure protections for a full year after the active duty end date.  The Foreclosure Relief and Extension for Servicemembers Act of 2014 (S. 2404) was introduced to extend foreclosure protections to give military personnel and their families the peace of mind during re-entry to civilian life.

The proposed legislation comes on the heels of the release of the Information on Mortgage Protections and Related Education Efforts report from the General Accountability Office to Congressional Committees.  The findings in the report included:

  • Loan Servicers are not collecting information about SCRA mortgages in a c0mprehensive manner
  • Delinquency rates at large servicers ranged from 16 to 20% for SCRA-eligible borrowers (which was more than 4 times higher the rate of other military borrowers)
  • Delinquency rates at the credit union level were under 1%
  • SCRA-eligible people are often not asking for the servicemember benefits to which they are entitled.  At one bank, 82% of SCRA-eligible borrowers had interest rates above 6%

It should be noted that much of the data included in the report is anecdotal, primarily because statistics have not been kept by the lending industry.  Besides the need for better record keeping and accountability, the need for education and information services directed at both military personnel and lenders is becoming increasingly important. Lenders and others seeking to take foreclosure or other actions must remain diligent about active duty verification and very careful and thorough preparation of affidavits of military service.  Above all,  military affidavits should be drafted based upon first-hand inquiry.

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News: Synopsis of Servicemembers Civil Relief Act – Need for Military Verification

Jun 02 2014
By: Roy L. Kaufmann
Categories: News

military verificationA compact article on the protections offered under the Servicemembers Civil Relief Act (“SCRA”) and military verification was recently written by Lee R. Schroeder, Esq. and published on Limaohio.com.   The article posts welcome reminders about out the need for military verification  and mandatory nature of  verification of military status and the protections afforded by the Act.

While the article does correctly indicate that the penalties for violation of the SCRA can be substantial:  $55,000 for the first offense and double for a subsequent offense, there is also some valuable information missing.

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The Court Tells Me I Need A Military Affidavit – Now What?

Apr 13 2014
By: Roy L. Kaufmann
Categories: SCRA - General

need a military affidavitIt happens every day, all over the country.  A Plaintiff files suit.  The Defendant doesn’t show up and then the Clerk throws a road block at the Plaintiff.  No default judgment may be entered until the Plaintiff produces an affidavit.  The Clerk explains that a federal statute, the Servicemembers Civil Relief Act (“SCRA”) is designed to protect active duty servicemembers and prohibits the Clerk from entering judgment without the affidavit.  The affidavit basically says that a diligent search has been conducted and that the Defendant is not on active military duty or otherwise protected by the Act. You need a military affidavit.

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Mass. Law: Notice Shifts Burden from Servicemembers To Lender

Apr 13 2014
By: Roy L. Kaufmann
Categories: Legislative Developments

shifts burdenThe Servicemembers Civil Relief Act (“SCRA”) generally requires that, for a Servicemember to be protected by the provisions of the SCRA, the servicemember must affirmatively send a notice to lenders.  A provision in the SCRA that shifts burden to the lender regarding notice does not exist.

The SCRA, at 50 U.S.C. App. § 533, provides certain protections in the context of residential foreclosures. One of those protections is a usually a moratorium on foreclosures if the loan predates the Active Duty Start Date.  The length of this foreclosure not only includes the period of active duty, but a period after the Active Duty End Date.

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Who is protected by the Servicemembers Civil Relief Act?

Mar 26 2014
By: Roy L. Kaufmann
Categories: SCRA - General

Who is protected by the servicemembers civil relief act?An analysis of the US Code identifies who is protected by the Servicemembers Civil Relief Act.  Active military members (including reservists, National Guardsmen, commissioned officers of the Public Health Service and of the National Oceanic and Atmospheric Administration who are in active federal service). Dependents of these people are eligible for some of the benefits of the Act.

“Active duty” for armed services is defined in 10 U.S.C. § 101(d)(1) as “fulltime duty in the active military service of the United States … [including] full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned.” “Active military service” is not further defined in Section 101 of Title 10, U.S. Code, although active service is given the meaning service on active duty or full-time National Guard duty in Section 101(d)(3).

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Re-enlistment Does Not Restart SCRA Protections

Feb 25 2014
By: Roy L. Kaufmann
Categories: News

re-enlistment Section 527 of the Servicemembers Civil Relief Act (“SCRA”) generally requires that interest rates on obligations that pre-date active duty be rolled back to 6% upon request of the servicemember and adequate demonstration that the servicemember is eligible for this and other protections.  Other protections deal with foreclosure proceedings, insurance, and default judgments in court.  The logic behind this benefit is that, after a servicemember is called to duty, his income may be reduced and the reduction in interest rate is to soften the financial impact upon the servicemember and his family.   A lender has a right to ask the court to determine that, notwithstanding the new military service, the servicemember has not been disadvantaged to the point where he merits the reduction to 6%.  Such might be the case if the servicemember is particularly wealthy, has other sources of income, or is at a particularly high grade level.

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Many Military Borrowers Not Taking Advantage of SCRA Benefits

Feb 24 2014
By: Roy L. Kaufmann
Categories: News

scra benefitsIn a report issued by the U.S. General Accounting Office, it examined the circumstances under which active duty personnel are taking advantage of the provisions of the Servicemembers Civil Relief Act (“SCRA”) which limit the cap on mortgage interest rates on mortgages taken out before entry into active military service.  The conclusion raised by the report is that SCRA-eligible individuals are not taking advantage of their SCRA benefits. The GAO recommended that there be more outreach to SCRA-eligible borrowers to educate them about the protections afforded under the SCRA and how to request those protections.

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