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Mortgages

I am on active duty in the military or have been on active duty within the past year. Am I protected from foreclosure?

The Servicemembers Civil Relief Act (SCRA) provides military personnel and their dependents protections when it comes to issues related to mortgages and housing.

If you are on active duty and obtained a mortgage before you went on active duty (also known as a “pre-service mortgage obligation”), you generally cannot be foreclosed on without a valid court order (regardless of whether you told your lender or servicer acting on your lender’s behalf of your active duty status) while you are on active duty, as well as for an additional nine months after leaving active duty.

The SCRA provides protection against default judgments (which are rulings against a party to a lawsuit because he or she didn’t appear in court) against a servicemember – including foreclosure cases before a judge – while on active duty. If you rent instead of own your home, the SCRA prevents eviction of servicemembers or their dependents without a court order during a period of military service, as long as your monthly rent is less than $2,975.54 (this is the limit for 2011).

If you obtained a mortgage before you went on active duty, the SCRA requires your lender or servicer acting on your lender’s behalf to reduce your mortgage interest rate to 6 percent (including service charges and fees) for the entire time you are on active duty, and for an additional year after you leave active duty. Any interest above the six percent cap is forgiven, not deferred. To receive this interest rate reduction, you must provide your lender or servicer acting on your lender’s behalf with written notice and a copy of the orders calling you to active duty no later than 180 days after you leave military service.

If you believe your rights under the SCRA have been violated, you should contact the nearest Armed Forces Legal Assistance Program office. If you are a dependent of a servicemember, you can contact or visit your local military legal assistance office. Go online to find an office within the continental United States or worldwide. For additional servicemember assistance and resources – even if you are no longer on active duty – visit the American Bar Association’s ABA Home Front.

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