Homeownership help for military members

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Homeownership help for military members

by: Kim Suchek | .
published: September 25, 2012

Hello Military Community,

As we all know, many families are having financial issues in regards to their mortgages. Unfortunately, this is a key problem for many military families who are facing financial situations and find themselves relocating more frequently than civilian families because of the demands of military life. An article I read recently stated that 33 percent of active duty personnel are required to relocate each year. These continuous moves can leave military families more vulnerable to a drop in housing prices and the cost of paying for more than one mortgage.

In June of 2012, a new mortgage relief program for service members went into effect and was approved by the government. This is a joint effort by many agencies and departments, including the Federal Housing Finance Agency (FHFA), the Consumer Financial Protection Bureau (CFPB) and the Department of Defense.

The program expands the national mortgage settlement that the government previously reached with some of the largest banks, and it steps up enforcement of the Service members Civil Relief Act (SCRA). The government is particularly concerned about firms that required military families to waiver rights they have as members of the military before they offer assistance. In some cases, service members were advised to stop making mortgage payments, and then suffered harm for doing so.

The key SCRA-related components of the program that offer relief to service members include:

• Compensation for Wrongful Foreclosures: Every service member that suffered a foreclosure since 2006 (when the housing market collapsed and house values plummeted) will have his/her file reviewed. The review will be performed under the supervision of the Department of Justice (DOJ) and the review will determine if the foreclosure violated SCRA. If any violations are found, the mortgage lenders will be required to pay significant compensation to parties that they damaged. The White House stated that the damage will be either: The service members lost equity, plus interest, and an additional $116,785 or an amount provided for the same violation as a result of a review conducted by the banking regulators.

• Compensation for Excessive Interest: Any service member that was charged more than the 6 percent limit set by the SCRA is entitled to compensation equal to four times the excess interest they were charged. Again, the DOJ will supervise the review done by the mortgage lenders.

• Foreclosure Protection and Hostile Fire/Imminent Danger Pay: No matter when their mortgage was secured, all service members are protected from foreclosure for nine months from the time that they received hostile fire/imminent danger pay, as long as they were stationed away from their home.

Because a PCS often requires a quick move, service members are especially vulnerable to financial harm, especially if they own more on their mortgage than their home is worth and can only sell their home by doing so at a loss. As military families know, PCS is a hardship. Not only on your family emotionally and physically but also financially. Remember, if you have a loan that is backed by Fannie Mae or Freddie Mac and you have a PCS order, you will have the ability to sell a primary residence that was purchased before June 30, 2012 for less than you owe on your mortgage balance. You do not have to be behind on your mortgage or in default. If your home sells for less than you owe, you won’t be responsible for the remaining balance.

The Government intends this relief offered to veterans and their families, including the military families harmed by wrongful foreclosures and excessive interest, to be part of its coordinated effort to improve the economy by expanding refinancing opportunities through the HARP program and reducing fees for the FHA streamlined refinance program. Service members and their families who feel that their rights under the SCRA were violated should contact their nearest Armed Forces Legal Assistance Office or one of the free legal assistance organizations you are eligible for. Here are a few resources:

Lawyers Serving Warriors: Provides free legal services to warriors of OIF/OEF. www.lawyerserving warriors.com

Lawyers for Warriors: Is a 501 ©3 organization which has a mission to provide pro bono legal services to U.S. service members, especially those who are deployed to hostile-fire zones. After identifying troops needing legal assistance, the group will pair the warrior with an attorney specializing in that area of law. It also provides legal assistance to recently returned vets and their families. www.lawyersforwarriors.org

U.S. Air Force Legal Assistance: This website is intended for active duty, reserve component and retired military members, their family members and others eligible for legal assistance through the military. aflegalassistance.law.af.mil/lass/lass.html.

Best wishes from my family to yours,

Kim Suchek

If you have any questions or concerns or would like to share a story or situation, contact me at Kim@MilitaryResourceBooks.com and visit my website for updated information and other resources not listed in my book.

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