Foreclosure Provisions of the Servicemembers Civil Relief Act
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Greg, a Chicago homeowner and Vietnam Vet, received benefits through financial counseling and assistance provided through the Homeownership Preservation Foundation (HPF). Hospitalized and falling behind on his mortgage payments, Greg received assistance through the Credit Counseling Resource Center. He was able to restructure his mortgage payments and revamp his monthly budget. |
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With more than 165,000 servicemembers now on active duty in Iraq and Afghanistan, it is important for banks to remember their obligations under the Servicemembers Civil Relief Act (SCRA). (Public Law 108-189, 117 Stat. 2835 codified as 50 U.S.C. App. §§ 501-596).
The SCRA contains special rules regarding debts for real or personal property secured by a mortgage, trust deed, or similar security interest in real personal property owned by a servicemember. Generally, the SCRA prohibits the sale, foreclosure, or seizure of property, based on a breach of such a secured obligation, during the period of military service or within 90 days thereafter except by court order. The prohibition applies only to obligations that originated prior to the servicemember's military service, and for which the servicemember is still obligated. (See OCC Advisory Letter 2004-8 at www.occ.treas.gov/ftp/advisory/2004-8.txt) |
