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As Long as We Remember...

February 9, 2011

Veteran Foreclosures A National Disgrace

Kevin E. Dayhoff

The Soldiers' and Sailors' Civil Relief Act (SSCRA) of 1940 was passed into law just prior to World War II to provide certain legal protections for members of the military in such matters as civil actions, foreclosures, and bankruptcy caused by lengthy absences from home while on duty.


Never heard of this law? Well, you are not alone. Apparently some of the nation’s largest financial institutions – that should know the law – have never heard of it, either.


Just last Thursday, The New York Times carried a front-page story involving an Iraq veteran who lost his home through foreclosure.


What is particularly upsetting about the story is that it is alleged that the servicemember had his home taken away from him in violation of a law intended to protect active military personnel from creditors, according to The Times. “(A)gents of Deutsche Bank foreclosed on his small Michigan house, forcing Sergeant Hurley’s wife, Brandie, and her two young children to move out and find shelter elsewhere…”


The Iraq and Afghanistan wars have seen our nation utilize a large number of reservists and National Guard men and women in uniform. The deployments have often caused financial hardships, especially when military personnel find themselves trying to make ends meet on military pay that is far less than what they make in their civilian lives.


The New York Times article notes: “Even though some of the nation’s military families have been sending their breadwinners into war zones for almost a decade, some of the nation’s biggest lenders are still fumbling one the basic elements of this law — its foreclosure protections.”


And last week USA Today carried an article by Gregg Zoroya, “20,000 military members, vets faced foreclosure in 2010,” which began with the chilling news that “…veterans, active-duty troops and reservists who took out special government-backed mortgages lost their homes last year — the highest number since 2003.”


According to various disturbing media reports, the “rate of foreclosure filings in 2010 among 163 Zip Codes located near military bases rose 32% over 2008, according to RealtyTrac, a foreclosure research firm. This compares with a 2010 increase in foreclosures filings nationally of 23% over 2008.


“The housing crisis has hit military families particularly hard in part because of transfers and the loss of civilian jobs left behind by reservists.”


Our nation should hang its head in collective shame for such miserable treatment of the very men and women deployed to protect us and our way of life. It is inexcusable.


Some of the media accounts re-telling stories of harassment in clear violation of federal statutes, by “behemoth” mortgage institutions, such as JP Morgan-Chase, of men and women on active duty really ought to make everyone angry.


For additional context, please understand that – according to the USA Today article – “Loans from private banks that are guaranteed by Veterans Affairs have historically outperformed other categories of mortgages, according to the Mortgage Bankers Association of America…”


The 1940 SSCRA law has been amended many times over the years. However, to make matters worse, if that were possible, reports of such shabby treatment has occurred in spite of the fact that laws protecting military personnel have actually been on the books, in one form or another, since the American Civil War.


So, as you may now understand, above and beyond the fact that looking after military personnel, who are serving our country, ought to be common sense, the laws are not new and have been in effect for over one-and-a-half centuries.


Yet, according to a January 19 article on the Huffington Post by Torrey Shannon, “JP Morgan-Chase ‘Accidentally’ Foreclosed on Military Mortgages: Violated Decades of Existing Law…”


Ms. Shannon writes: “Earlier today, and other news agencies reported a big win for a Marine who fought a 5-year legal battle with the behemoth mortgage institution, JP Morgan-Chase…”


The attorney, Dick Harpootlian, for Marine Capt. Jonathan Rowles, an F/A-18D weapons system officer, spoke for many when he said, military men and women “ought to only have to worry about fighting the fight and keeping alive, not about whether their wives and children and going to be put out on the street.”


The Huffington Post article further explained: “The SSCRA was largely unchanged from its enactment in 1940. On December 19, 2003, President [George W.] Bush signed into law the new-and-improved Servicemembers Civil Relief Act (SCRA)…  In other words, it was simplified.


“The most recent amendment to the SCRA to provide foreclosure protection to servicemembers occurred in section 2203 of the Housing and Economic Recovery Act of 2008.


Under the SCRA law, according to various accounts, “only a judge can authorize a foreclosure on a protected service member’s home … The law also caps a protected service member’s mortgage rate at 6 percent.”


The New York Times observes that by 2005, “violations of the civil relief act were being reported all across the country, some involving prominent banks like Wells Fargo and Citigroup… By 2006, a Marine captain in South Carolina was doing battle with JPMorgan Chase to get the mortgage interest rate reductions the act requires.


“Chase eventually reviewed its policies and, earlier this month, acknowledged it had overcharged thousands of military families on their mortgages…”


At a time in which our nation continues to struggle in a beleaguered economic climate, which many everyday families blame our banks for causing, wouldn’t you think these very institutions would go out of their way to act responsibly for the public good, in an attempt to repair its collective reputation?


Don’t you think that our nation ought to go out of its way to protect the very people who are putting their lives on the line protecting us?


I’m just saying…


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