RealtyBizNews - Real Estate Marketing and Beyond
Real Estate Marketing & Beyond
Home » Housing » US Real Estate » Real Estate » Lenders Payout Million for Improper Military Foreclosures

Lenders Payout $22 Million for Improper Military Foreclosures

By Mike Wheatley | May 30, 2011

Two of the biggest mortgage lenders in the US will payout a combined $22 million settlement in response to charges that they foreclosed 178 homes of military personnel improperly, it has been revealed.


178 military foreclosures were improper, ruled the US justice department

Improper military foreclosures have affected 178 families. Courtesy of Military Schools

The news will come as a welcome relief to those families affected, many of whom had been serving in Afghanistan or Iraq when their homes were illegally sold between 2006 and 2009.

Several of those whose homes had been foreclosed had been wounded while serving in Afghanistan or Iraq, while others had since been diagnosed with post-traumatic stress disorder, said officials.

It was alleged that Morgan Stanley and Bank of American Corp. subsidiaries imposed the military foreclosures on the families without obtaining the necessary court orders to do so, said the Justice Department.

Each affected family will receive a payout of an average $125,562.


Bank of America and JP Morgan Chase agreed a $22 million pay out to US military personnel

JP Morgan Chase were one of two mortgage lenders who improperly foreclosed US military homes. Courtesy of IB Times

“This is easily the biggest amount of money we’ve ever seen recovered,” said assistant attorney general Thomas E. Perez after the announcement.

“Those men and women who are out there risking their lives to defend our nation deserve, at the very least, not to have their homes illegally taken away from them,” added Perez.

As well as the settlement, the mortgage lenders had agreed that they would provide better mortgage payment protection for US military personnel, said Perez.

BAC Home Loans Servicing, a subsidiary of Bank of America, and Saxon Mortgage Services, a subsidiary of Morgan Stanley, also said that they would investigate possible improper foreclosure cases from 2009 to 2010 as well.


Sgt. James Hurley also won an out of court settlement against Saxon Mortgage Services

The mortgage lenders investigation began after an earlier enquiry by Sgt. James Hurley. Courtesy of colonel6 files

US military personnel are supposed to be given added protection by the Servicemember’s Civil Relief Act, and cannot have their property seized or be evicted while away on active duty. However, the lenders ignored this law and went ahead with the foreclosures anyway.

The investigation by the Justice Department was launched earlier this year following a separate case by Sgt. James Hurley and the US Marine Corps after his Hartford, Michigan home was foreclosed by Saxon back in 2005, while Sgt. Hurley was serving in Iraq.

Hurley and Saxon reached an out of court settlement earlier this year, it was reported.


Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
  • Sign up to Realty Biz Buzz
    Get Digital Marketing Training
    right to your inbox
    All Contents © Copyright RealtyBizNews · All Rights Reserved. 2016-2024
    Website Designed by Swaydesign.
    linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram