Another $186 million in compensation will be awarded to 1,461 service members and their co-borrowers over the unlawful foreclosure of their homes as part of the Department of Justice's settlement with five of the nation's largest mortgage servicers, according to an announcement from the DOJ.
These totals bring the amount of foreclosure-related compensation given to servicemembers by the five servicers (JPMorgan Chase, Wells Fargo, Citi, GMAC Mortgage, and Bank of America) to more than $311 million. A total of 2,413 sevicemembers and their co-borrowers are eligible to receive the compensation under protections afforded them by the Servicemembers Civil Relief Act (SCRA), according to the DOJ.
“While this compensation will provide some financial relief to more than 2,400 service members and their families, the fact is no one serving our country in the Armed Forces should ever have to worry about losing their home to an illegal foreclosure,” said Acting Associate Attorney General Stuart F. Delery. “Through the Servicemembers and Veterans Initiative, the Department of Justice will continue to use every tool at our disposal to protect service members and their families from such unjust actions.”
“While this compensation will provide some financial relief to more than 2,400 service members and their families, the fact is no one serving our country in the Armed Forces should ever have to worry about losing their home to an illegal foreclosure.”
The servicemembers are receiving the compensation as a result of the SCRA portion of the 2012 National Mortgage Settlement and a previous settlement with Bank of America. The foreclosures in question took place over a six-year period from January 1, 2006, to April 4, 2012. The servicers are alleged to have obtained foreclosure proceedings or default foreclosure judgments without notifying the court that the servicemember was on active duty in the military. Section 533 of the SCRA prohibits non-judicial foreclosures on servicemembers who are either in military service or within the applicable post-service period, provided the mortgages were originated prior to the beginning of their military service.
Under the terms of the NMS, each identified servicemember with a mortgage serviced by one of the five servicers named will receive $125,000, plus any lost equity in the property and any interest on the lost equity, according to the DOJ.
“We are very pleased that the men and women of the armed forces who were subjected to unlawful foreclosure judgments while they were serving our country are now receiving compensation,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “We look forward, in the coming months, to facilitating the compensation of additional service members who were subjected to excess interest charges on their mortgages. We appreciate that JP Morgan Chase, Wells Fargo, Citi, GMAC Mortgage and Bank of America have been working cooperatively with the Justice Department to compensate the service members whose rights were violated.”
The compensation schedule is as follows:
Click here for more in the SCRA.