Servicemembers Civil Relief Act: Mortgage update Published Jan. 9, 2012 By Capt. Benjamin Hernandez-Stern 129th Office of the Staff Judge Advocate MOFFETT FEDERAL AIRFIELD, Calif. -- In May of 2011 the Department of Justice settled with a subsidiary Bank of America on behalf of servicemembers whose homes were unlawfully foreclosed on. The allegations against BAC Home Loans Servicing LP stemmed from allegations from servicemembers who claimed Countrywide Home Loans Servicing LP, which Bank of America acquired, foreclosed on their homes without first getting a court order, as required by law. Under the Servicemembers Civil Relief Act, or SCRA, mortgage lenders may not foreclose or seize property for a failure to pay a mortgage debt while a servicemember is on active duty for a nine months grace period, unless they have the approval of a court. If the lender initiates a court proceeding to foreclose during the grace period, the lender must show that the servicemember's ability to pay the loan was not affected by his or her military service. Note that after December 31, 2012, the grace period for servicemember protection will drop to three months. Also, recall that like any other pre-Title 10 service obligation, mortgages are subject to an interest rate reduction to 6%. To take advantage of interest rate reduction, servicemembers must provide their mortgage servicer: (1) notice of their call to active duty; (2) a copy of their orders; (3) information to identify their mortgage loan; and (4) evidence that the mortgage obligation predated their call to active duty. In November 2011 the DOJ announced that each of the approximately 160 servicemembers involved in the Bank of America settlement would receive a minimum $116,785 payment, plus compensation for any equity lost. If you are interested in learning more, the 129th RQW Office of the Staff Judge Advocate urges you to visit the legal office during our legal assistance hours of 8:00 to 11:00 a.m. on Sundays of drill. The content of this article represents general legal principles. The law is continually changing; although the information in this article was current as of the date it was drafted, some provisions may have changed.