Assistant Director for the Office of Servicemember Affairs
Consumer Financial Protection Bureau
Military Permanent Change of Station (PCS) Guidance for Mortgage Servicers
June 21, 2012
Good morning and thank you for coming. I’m Holly Petraeus, Assistant Director for Servicemember Affairs here at the Consumer Financial Protection Bureau. Although I am certainly not the most important person in the room today, since my office deals with military issues I was invited to serve as a Master of Ceremonies for a couple of exciting announcements about guidance to mortgage servicers concerning military homeowners faced with Permanent Change of Station, or PCS, orders. And I’d like to thank Director Cordray and all those who have gathered here today for their support of the military community in general, and these initiatives in particular. We’re pleased to have the support of the prudential regulators who signed the guidance we’re announcing today – the Federal Reserve Board, the FDIC, the NCUA and the OCC – as well as that of the FHFA, the Department of Defense, the VA, USDA, Treasury, Justice, and HUD.
A big part of my role at the CFPB is to work on consumer protection measures for military personnel and their families. I’ve visited 37 military installations in the past 18 months, and I can tell you that I have heard over and over again from military homeowners whose house has gone underwater, and who don’t know what to do when they get PCS orders. They’re terrified that a foreclosure will ruin their finances as well as putting their security clearance at risk, and they’re looking for helpful answers. Unfortunately, in too many instances, they haven’t gotten those answers from their mortgage servicer in a timely manner, if at all. In the end, many of them have seen no choice but to avoid foreclosure by leaving their family in the home and going alone to their new duty station – a separation that can last 3 years or more. There are programs and policies out there that might help military homeowners with PCS orders, some of them developed in the last year – and we’re going to hear about a brand-new one shortly from Mr. Edward DeMarco, the Acting Director of the Federal Housing Finance Agency. But in many cases servicemembers haven’t found out about them quickly enough to do any good. Too often they’ve been strung along, given inaccurate information, and kept in the dark as to the status of their case.
We’ve heard from servicemembers who’ve been told they had to be delinquent to qualify for help, and advised to skip a couple of payments; who’ve been asked to sign a waiver of their rights under the Servicemembers Civil Relief Act just to have their case evaluated; who’ve been stalled with repeated demands for loan documents; who’ve been routed to a different loan-servicing official with each call who then makes them start over again from square one; and who’ve even been listed as “not responding to requests for documents” during deployment, despite the fact that their spouse had a power of attorney and was providing all requested information to the servicer.
Today the CFPB and the prudential regulators I mentioned earlier are sending a strong message that servicers have an obligation to provide clear, timely, and accurate information to servicemembers when they get PCS orders. The signers are making it clear that they will use their oversight and enforcement powers to ensure that military homeowners get the information they need from their mortgage servicers early enough to make an informed decision that will provide the least damage to their financial readiness.
Military life asks a lot of our all-volunteer force. In times of conflict it may send them across the world into harm’s way, and even in times of peace it requires frequent moves: 24 moves in 37 years in my case. They do what is asked of them faithfully, without question or delay. Is it too much to ask that their mortgage servicers, in turn, serve them well? I don’t think so, and I believe the people who are gathered here today don’t, either.