While protecting the United States during the war on terrorism, some servicemen and servicewomen may face difficulty in meeting certain financial obligations at home, such as rent or mortgage payments, if they are activated for military duty. HUD has taken steps to ensure that service members protecting our country do not suffer the added burden of worrying about the loss of a home or foreclosure.
Military personnel should learn about the SCRA protections and benefits it provides for them and their families. The SCRA can provide many forms of relief to military members. Below are some of the most common forms of relief:
- Mortgage Relief – The federal government act will limit and reduce the interest rate on a mortgage. Banks and mortgage lenders need to, if you request it, lower the interest rate on your home loan to no more than six percent per year. This new interest rate will be effective during the period of active military service. The lender will also need to recalculate your new monthly mortgage payments to reflect the lower interest rate on your loan.
Sunset Provision Extended
The most immediate change to SCRA became effective on December 29, 2010 when Congress extended a sunset provision enacted in 2008 regarding mortgage foreclosures. Specifically, section 303 of SCRA governs any servicemember who, prior to his/her military service, executed a transaction subject to a mortgage, a trust deed, or other security loan. This section of SCRA prevents the lender from exercising any right or option under the contract due to the mortgagor’s failure to pay on the loan due to his/her military service. Most noteworthy, a lender cannot initiate a foreclosure, except by action of a court of competent jurisdiction, until nine months after the term of active duty terminates. In addition, if a sale or foreclosure does occur and the servicemember is eligible for the protections under SCRA, then the sale or foreclosure is not valid if made prior to the nine months after the term of active duty terminates.
The original 90 days was set to expire on January 1, 2011. The Senate introduced and passed S. 4058 (The Helping Heroes Keep Their Homes Act of 2010). This then passed the House of Representatives and was signed into law by President Obama on December 29, 2010. The new amendment, which became effective with the President’s signature, enlarges the sunset to December 31, 2012.
The SCRA provides many more protections than those listed above. If you have questions on the program, or are facing other foreclosure issues–Military legal assistance attorneys are available to provide guidance on the SCRA. They can advise people on foreclosure and mortgage issues, evictions, help people deal with domestic issues, and much more. For more information, MilitaryOneSource.com is an excellent source on the Servicemember’s Civil Relief Act.
Williamsburg Military Insider 