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Help for Military Homeowners


When I was at Fort Drum, NY last week I heard from a military spouse who said her family has been separated for 4 years – partly because of deployments but also because they can’t sell their house. At the same meeting an officer told me that he is underwater on a home he bought at a previous assignment. He wondered if there were any options for him that wouldn’t ruin his credit or require a large sum of money he didn’t have.

I’ve had conversations like these repeatedly in my travels to military communities across the country during the past year. The housing crisis has had a devastating impact on military homeowners, and their unique challenges have made it difficult for them to get help. So I’m glad to see that important protections for military homeowners were included in the recent settlement between the Federal government, 49 state Attorneys General, and five of the largest mortgage loan servicers: Bank of America, JP Morgan Chase, Citigroup, Wells Fargo, and Ally Financial.

The mortgage servicers who signed the settlement have agreed to review their files for violations of the Servicemembers Civil Relief Act (SCRA). They will give monetary relief to those families who saw their homes taken from them in violation of the SCRA, or who did not receive the SCRA interest-rate reduction to which they were entitled. In one way the settlement goes farther than the SCRA: it protects from non-judicial foreclosure all military homeowners who are deployed to a combat zone, even if the mortgage was not obtained before the servicemember entered active duty.

The settlement also has provisions for military homeowners who get Permanent Change of Station (PCS) orders. The banks will provide short-sale agreements and deficiency waivers to those servicemembers who were forced to sell their home at a loss due to a PCS and were not eligible for the military’s Homeowners Assistance Program (HAP). This will help servicemembers who were underwater on homes they bought between July 1, 2006 and December 31, 2008, or who received a PCS after October 1, 2010.

The servicers are also going to pay $10 million to the Veterans Housing Benefit Program Fund, which is used by the Department of Veterans Affairs (VA) to guarantee VA loans on favorable terms for eligible veterans.

You can read more about the settlement here. If you feel that your rights were violated by one of the mortgage servicers in the settlement you can call the Justice Department at 1-800-896-7743. But you don’t have to call in order to get the help offered by the settlement, and you shouldn’t give information or money to anyone who says they will help you get in on the settlement! If the banks in the settlement owe you money they will try to find you; you don’t need to fill out an application or file a claim.

I hope this agreement will bring peace of mind to some of the military families who have been struggling with housing-related challenges, and that it will inspire other mortgage lenders and investors to look at what they can do for their military customers. As a reminder, if you have a complaint about your mortgage servicer you can file it with the CFPB at We also appreciate it when you use our “Tell Your Story” feature to let us know about what’s happened to you. Your stories are a big help to the efforts of the Office of Servicemember Affairs to understand the military issues that are important to you.

  • Losing Hope in Humanity

    First, I want to make it clear, I completely agree that if SCRA was violated, then the violator should get into trouble and monetary penalities should be assessed to them and given to the service members harmed.

    I feel for military members.  I was in the military for almost a decade, so I understand what it is like.  I too served in OIF/OEF and other missions in which I was called away from my family.  But the two stories spoke of in this blog do not make me feel bad for them or feel they deserved any more protections than those already provided under the SCRA. 

    I had the common expectation that any base I was stationed at was temporary, so I never would even consider buying a house, since I could rent.  While I was an enlisted, the military paid me a basic housing allowance for me and my family to live on, so we rented.  So I feel no sympathy for the two people in the stories mentioned above.  Basic housing allowance is in addition to the normal pay they receive and is not the only allowance provided that is in addition to normal pay.  So I am sorry that they can not sell their home but many people are unable to and nobody made them buy it to begin with.

    Actually, if the government really wanted to help these military families, they should provide for more housing for the military families.  Then, military members wouldn’t need to buy a house at the base, nor would they need to worry about trying to sell their home when they are stationed someplace else.  Also, this would save on the BHA pay too.  This won’t solve any problems now, but I don’t see any reason to require a Bank to waive portions of a loan (unless they violated a law or regulation). 

    Maybe the government should go back on the person who sold the house and require that they pay the money back the Bank provided to them on behalf of the borrower.  I think too many people think that the money that someone borrows from a Bank doesn’t go anywhere.  When someone borrows money to buy a home, the Bank pays out money to the seller of the home.  From there the seller does whatever with that money, be it pay off their mortgage on that home they sold if there was one, buys a new home, or spends it in other ways.  But that means that the money a person borrowed did not just stay at the Bank, so when a Bank is required to forgive some of a loan, they do lose money.  Yes, a Bank does earn money from the loan due to interest, but that is the cost the consumer has to pay to borrow money and goes towards paying the Bank’s employees, paying bills, etc.

  • Ozie

    does this settlement applies to those service members who have a rental property as an investment and then bank foreclose  it
     while the service member is in deployment in war zone area? and was taxed a big amount of money because of this foreclosure

    • buy car accessories

      i dont think so 


    The new programs focus on military families and homeowners with FHA loans. The federal housing secretary says that affects more than 30,000 Nevadans. Some of the president’s proposals can be done without the approval of Congress. The announcement is part of the nationwide mortgage settlement announced last month. The major push announced Tuesday may help families at Nellis Air Force Base.

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