Banks settle for $22M in SCRA foreclosures case - Navy News | News from Afghanistan & Iraq - Navy Times

Banks settle for $22M in SCRA foreclosures case

About 180 troops will share in a settlement of more than $22 million that was reached with two lenders who allegedly wrongfully foreclosed on the service members’ homes without obtaining court orders, in violation of the Servicemembers’ Civil Relief Act, the Justice Department announced Thursday.

“This will send a strong message to lenders and servicers that they will be held accountable” for protecting service members’ rights, said Thomas Perez, assistant attorney general for the Justice Department’s Civil Rights Division.

Troops “have our backs and they need to know we have theirs,” Perez said.

BAC Home Loans Servicing LP, previously known as Countrywide Home Loans Servicing LP, a subsidiary of Bank of America Corporation, will pay $20 million. That’s an average of $125,000 for each of the approximately 160 service members who lost their homes to foreclosure between January 2006 and May 2009, Perez said. The consent order was filed in U.S. District Court in the Central District of California in Los Angeles on May 26.

In the second settlement, Saxon Mortgage Services will pay $2.35 million, an average of $130,555 to each of 17 service members allegedly foreclosed on between January 2006 and June 2009 without court orders. That was filed May 26 in U.S. District Court for the Northern District of Texas in Dallas.

Perez said service members’ settlements will be based on their individual situations and the harm suffered, and officials will start the process of meeting with service members to determine their status.

The SCRA prohibits foreclosures without court orders on pre-service residential mortgages of active-duty service members.

Perez declined to comment on specifics of investigations into other lenders’ violations of the SCRA.

Justice officials alleged that the lenders failed to determine whether the service members’ properties were protected by the SCRA or, in some cases, failed to provide protections even though they knew or should have known the troops were protected, Perez said.

Saxon neither denies nor admits the allegations, according to the consent order. The case involving Saxon was first brought to the attention of Justice officials by the case of Army Sgt. James Hurley, who resolved his claims against Saxon earlier this year in a confidential settlement. His house in Michigan was foreclosed on in 2005.

Justice officials initiated their investigation into Countrywide in response to a Marine Corps referral, three days before a Marine’s house was scheduled to be foreclosed on, despite his repeated efforts to notify the company that he was protected under SCRA.

Both Saxon and Countrywide have agreed to compensate any additional individuals who were improperly foreclosed on between mid-2009 and Dec. 31, 2010.

The companies have also agreed to repair any negative credit report entries related to the foreclosures and will not pursue any remaining amounts owed on the mortgages.

Saxon and Countrywide also will now check the Defense Manpower Data Center’s website and their own files prior to conducting any foreclosure.

The consent decree requires a number of corrective measures, including training for employees, and monitoring, to include audits.

Among those affected were wounded troops, Perez said. He described a service member who suffered a back injury and traumatic brain injury in Iraq, and returned in a wheelchair. Although he has “defied the odds,” and succeeding in walking again, he still suffers from TBI, Perez said.

Service members who believe they may have been victims can contact their nearest military legal assistance office.

Troops also may contact the banks directly at 800-896-7743, mailbox 6 for Countrywide; and 800-896-7743, mailbox 995 for Saxon.