Treasury Department investigating illegal foreclosures on servicemembers
Among the most serious consequences of the economic downturn was the large number of foreclosed homes. In October more than 77,700 homes began the foreclosure process, and according to the Los Angeles Times that is up 10 percent from the previous month. Military families have been some of the hardest hit in terms of unscrupulous lending, and now the U.S. Treasury Department is investigating whether or not 10 major banks illegally foreclosed the homes of thousands of active-duty soldiers.
The inquiry will look at big-name banks including Wells Fargo and Bank of America. The department alleges that the businesses may have taken back the homes of about 4,500 troops who were eligible for assistance under the Servicemembers Civil Relief Act (SCRA), The Charlotte Observer reports. Both Wells Fargo and Bank of America have steadfastly disputed the charges but are cooperating with the investigation.
The SCRA was designed to provide certain exceptions for a number of obligations so that members of the military can focus on serving their country. Specifically, it can put a hold on things like outstanding credit card debt, taxes and, in this case, mortgage payments. The SCRA only applies to soldiers while they are on active duty and generally ends 30 to 90 days after their discharge.
This is not Bank of America's first run-in with the Federal Government when it comes to servicemembers. According to the newspaper, the bank was ordered to pay a total of $20 million to 160 soldiers who were foreclosed on between 2006 and 2009. Any such action is unacceptable says Congressman Brad Miller.
"If you're wearing the nation's uniform, if you're deployed in harm's way in service of your country, you should be able to focus your entire energy to our nation's service without worrying what's happening in a courthouse back home," Miller told the Observer.
Along with not having to worry about house payments, active duty soldiers may want to do the same for life insurance. AFBA's Better Alternative policy is well-suited to soldiers and ensures that coverage continues should they leave the military or retire. Additionally, for servicemembers under 50 and policies up to $250,000 no medical examination is required.