Real Estate Marketing & Beyond
The Justice Department and the Consumer Financial Protection Bureau have teamed up to warn mortgage servicers and housing providers that they’re unable to lawfully evict military and veteran families without a court order.
The warnings come at a time when many are leaving pandemic-related forbearance plans or moratoriums.
Service members and veterans both enjoy extra protections against eviction under the Servicemembers Civil Relief Act, which safeguards the mortgages of qualifying service members from being foreclosed upon. It also protects military renters from being evicted, unless their landlord obtains a court order. In addition, the law allows military families to terminate their residential leases early without penalty when forced to do so because of military orders.
The DOJ and CFPB both reportedly sent letters to mortgage services and housing providers last week, in response to a number of reports from military families and veterans alleging various violations. Some of the complaints included inaccurate credit reporting, misleading communications to borrowers and required lump sum payments to reinstate mortgage loans.
“The illegal foreclosures of military families in the last crisis was one of the financial industry’s worst failures,” Rohit Chopra, CFPB director, wrote in a statement.
A decade ago, mortgage servicers were accused of not following additional protections for military servicemembers and vets, which resulted in numerous settlements with regulators, including a $186 million settlement between the DOJ and some of the nation’s largest mortgage servicers.
“The CFPB will be closely watching mortgage servicers and will hold them accountable for illegal tactics perpetuated against military families,” Chopra said.
There are around 1.5 million U.S. borrowers who remain under some sort of forbearance program that will expire at the end of the year, and many of them could be military service members.
“The Department of Justice takes seriously its responsibility to safeguard the rights of servicemembers and veterans,” said Kristen Clarke, assistant attorney. “While servicemembers carry the great burdens of this nation, they should not have to worry that their sacrifices will result in economic harm to their families. Mortgage servicers and landlords must ensure that they are in full compliance with federal laws intended to protect servicemembers and their families during military service.”
