Creditors and lenders are already prohibited by law from taking advantage of active duty military members, but the Servicemembers Civil Relief Act (SCRA) is meant to provide additional safeguards while they navigate deployment, change of duty station orders or other unique circumstances military families face, especially related to buying or owning a home.
“Banks cannot charge more than 6 percent interest on mortgages for military families during service and up to one year after service ends,” Arkansas Attorney General Leslie Rutledge said in a news release. “This allows families to plan ahead and prevents creditors from selling, foreclosing or seizing an active duty service member’s mortgaged property during service.”
The SCRA also provides protection requiring a judge to stay mortgage proceedings if a service member shows that military service has affected his or her ability to comply with mortgage obligations.
Additionally, the 2012 National Mortgage Settlement requires five major mortgage servicers – Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo – to notify service members who are 45 days delinquent on mortgage payments that they are entitled to SCRA protections and are eligible for financial counseling from Military OneSource and Armed Forces Legal Assistance.
Rutledge released the following tips to help service members understand and use loan protections provided under the SCRA:
Independent reporting for Pine Bluff & Jefferson County since 1879.
• Inform the mortgage company that you are seeking protection under SCRA.
• Provide the lender with written notice of military service.
• Send the lender a copy of the orders calling the service member to active duty.
• Research time constraints that could impact eligibility for some protections.
• Consult the nearest Armed Forces Legal Assistance Office with questions regarding qualifications for SCRA.
In 2015, Rutledge launched the first Military and Veterans Initiative at the Attorney General’s office to assist active duty military service members, reservists, veterans and their families with consumer related issues, Veterans Treatment Courts and many other collaborative efforts.
Arkansas military service members, veterans and families can file consumer complaints with the Attorney General’s office.
Details: 800-482-8982 or consumer@arkansasag.gov, ArkansasAG.gov or facebook.com/AGLeslieRutledge.