Military servicemembers are getting shortchanged when it comes to protections against foreclosures, particularly after they enter active duty, according to several House Democrats who are introducing a bill to strengthen federal law that was enacted a year before the U.S. entered World War II.
The lack of more robust protections has resulted in only 1,600 servicemembers being compensated under the agreement stemming from the Independent Foreclosure Review, lawmakers said.
The Servicemembers Civil Relief Act (SCRA) was passed in 1940 but does not protect all servicemembers and their families from foreclosure “because its protections apply only to those who purchased homes prior to activation,” the lawmakers said.
SCRA provides a range of financial protections for military members as they enter active duty. It covers issues such as rental agreements, security deposits, prepaid rent, evictions, foreclosures, civil judicial proceedings, and income tax payments.
“Since SCRA protections are limited to homes purchased before an individual enters active duty service, these (Independent Foreclosure Review) violations likely represent only a subset of the number of military families subjected to abusive foreclosure and servicing practices,” said a statement released by the House members introducing the Military Family Home Protection Act.
The bill is sponsored by Democratic Reps. Elijah E Cummings, Mike Michaud, Adam Smith, Susan Davis, Mark Takano, and John Tierney, all ranking members of various House committees overseeing government reform, the armed forces and veterans affairs.
“The bill ensures that the homes of servicemembers are protected when they are most vulnerable—when they are placing their lives at risk overseas or recovering from service-related injuries here at home,” Cummings said.
The bill expands foreclosure protection to all servicemembers, regardless of when they purchased their home. The law would:
- Stay a home foreclosure action when servicemembers are receiving hostile fire or imminent danger pay;
- Stay a home foreclosure action for a 12-month period for servicemembers placed on convalescent status, for veterans who are medically discharged, and for surviving spouses of servicemembers whose deaths are service-connected;
- Double civil penalties for mortgage-related violations;
- Prohibit banks from discriminating against servicemembers, veterans, and surviving spouses who are eligible for these protections; and
- Eliminate the primary residence requirement for servicemembers that receive a military order to relocate to another duty station in order to qualify for mortgage refinancing.
The proposed legislation has received letters of support from the American Legion, Military Officers Association of America, Veterans of Foreign Wars, Iraq and Afghanistan Veterans of America, Paralyzed Veterans of America, Gold Star Wives of America, and Disabled American Veterans.