A plan announced by the Obama administration today will require the federal government to review thousands of servicemember held mortgages for illegal foreclosures and charges – and if yours is one of them you could see a sizeable payback from the mortgage companies.
The plan is part of a $26 billion settlement with several mortgage companies that looks, in part, to pay back troops whose homes were illegally foreclosed upon since 2006 or who were charged interest on their mortgages over 6 percent.
The settlement holds the companies accountable for violating the Servicemembers Civil Relief Act which, among other things, bars companies from foreclosing on a servicemember’s home without a court order.
Under the settlement the companies must provide military mortgage relief and pay back to foreclosed upon military homeowners at least $116,785 plus any home equity that would have accrued since the foreclosure. Those who were charged over the 6 percent interest rate allowed in the Servicemembers Civil Relief Act will be eligible to receive four times what they overpaid in interest.
According to this story, that means that a return of about $9,000 for a family who didn’t lose their house but did pay an improper 7 percent rate on $200,000 mortgage.
The settlement and Obama plan could mean great things – and huge financial relief – to families who have suffered under mortgage problems since 2006. While military families tend to shy away from special treatment, the settlement and payout rules announced today by the White House simply hold these companies accountable for taking advantage of those who are focused on serving and can’t spend all of their time babysitting their bank.
So, how do you know if you are eligible for this payout? Answer these simple questions:
- Was your mortgage through Wells Fargo, Citigroup or Ally Financial (the companies included in the settlement)?
- Was your home foreclosed upon since 2006?
- Were you or are you currently being charged an interest rate on your mortgage above 6 percent?
If your answer to any of these questions is “yes,” there is a possibility that you are eligible for the pay out. While the White House said servicemembers don’t have to apply to be able to receive the money or have their information reviewed, you can call and ask for help investigating whether or not you qualify.
To reach more information or to see if you are eligible call: 800-896-7743
About Amy Bushatz
Comments
Would this apply to members of the Reserves??
This applies to anyone who is eligible for the Servicemember's Civil Relief Act. Check out more about that here: http://www.military.com/benefits/content/military…
What about those of us that bought our homes after July 06, but before the second crash? I am currently $80K upsidedown, can't refi, and I qualify for exactly ZERO of the so called programs.
Does this apply to retirees?
While I'm not entirely sure about this, I would imagine it does IF you were foreclosed on while active duty or qualifying under other stipulations of the Servicemember's Civil Relief Act. Those details can be found here: http://www.military.com/benefits/content/military…
Medically discharged, foreclosed on while trying to relocate to less expensive domicile, bank converted home loan to unsecured loan, now upside down 100k on current mtg paying both. Where do we fit in?
Regarding the interest, according to the information on military.com:
Note: This law only covers debt incurred prior to military service.
I purchased my home 1980 in Virginia Beach while on active duty. Wells Fargo held the mortgage note at 9.5%, we refinance two years later and reduced the note to 7.5%. I retired from the Navy Oct. 1997. My question is, do I qualify for the relief even though I didn't loose my house through foreclosure?
Regarding the interest, according to the information on military.com:
Note: This law only covers debt incurred prior to military service.
I assume that like the HARP money, anything received will be taxable income.
Will this apply to those of us that had a mortgage held by Bank of America as well, or just the banks listed? If no, how did Bank of America get out of trouble for illegal forclosures?
I am wondering the same thing. BofA gave us the run around and eventually foreclosed on our home. They should definitely be held responsible!
I bought a home in Georgia WHILE on active duty. The terms were horrible (3 year ARM at 10.052 APR with an interest rate of 7.975). A year after buying the home, I fell behind on the mortgage payments. Within that same year I received orders and consequently tried to sell the home, however, the bank (Wilshire Credit Corp) foreclosed on the home before it could be sold (repossession foreclosure). My question is: Since the debt was acquired WHILE on active duty and not BEFORE I was on active duty, do I qualify for this military mortgage relief settlement?
Hi, I wanted to know if any of us will get help, we lost our home in 2009, but we had Calvet VA loan, we didn't get any help from them when it came to getting help. We were told that they don't modify loans and for us to leave the property since we couldn't make payments. We were told that we could do deed of lieu, and was also told to leave the property within 3 days after that. We left our property in October 2009 and then in July 2010 we got a paper that our property was going to be forclosed. I was really confused and tried to get help, but no one replied me or return my calls. Does anyone have any ideas or could help me. Thanks
I am on the same boat as you. I had military orders to PCS, I tried to rent it out but very low rent ; tried to sell I was 2/3rd the amount of the home so upside down. I did the deed in Lieu. Have you found out if we are eligible for this mortgage relief?
these reports come out and are so vague that when I call Wells Fargo, the just push me around. I'm not forclosed on yet, but bought the house in Jun 07 then PCS from VA to WA in 2010. I'm stuck at a high interest and Wells won't touch it. They tell me it's an "income" property becuase I'm no longer living there. Any help with details would be great!
VAs are easy to refi but what about standard conventional loans?
My parents who live in the United States qualify for this service member mortgage relief and we're all hoping that their property be saved. Luckily, the Perth mortgage that I bought recently offered a good and flexible payment terms, I don't have to worry about my property getting foreclosed.
I had to do a Deed in Lieu due PCS orders. Is CalVet loans fall into the same category to the banks? Benny
You are absolutely right. If something gets too slick, it will not feel as real. I totally agree with you. I used to read your posts regularly. I always feel what you are telling is with sense, and I love to read it. Thanks for sharing your ideas.