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Justice for Members of the Military Who Had Their Homes Unlawfully Foreclosed
On Thursday, the U.S. Justice Department announced that members of the U.S. military who had had their homes foreclosed unlawfully between 2006 and 2010 will receive a total sum of $39 million from subsidiaries of Bank of America and Morgan Stanley. Each of the 316 members, so affected, will receive a sum close to a minimum of $116,785 along with compensation and interest for any loss of home equity.
The announcement comes in the wake of settlements made in 2011 between the Justice Department and the BAC Home Loan Servicing LP and Saxon Mortgage Servicing Inc. The companies are subsidiaries of BAC and Morgan Stanley respectively. The subsidiaries had been found guilty of violating the Servicemembers Civil Relief Act, which allows members of the military to postpone or suspend certain financial obligations like outstanding credit card debt and mortgage payments.
Under the first settlement, BAC will pay more than $36.8 million to service members whose homes were foreclosed by BAC Home Loan Servicing, unlawfully.
The bank has already started to compensate 142 service members whose homes it had illegally foreclosed between 2006 and 2009.
A review of information about foreclosures made by the bank from 2009 to 2010 revealed Bank of America, having illegally foreclosed the homes of another 155 service members within that short period.
Currently, the DOJ is actively investigating and looking through the audits of Wells Fargo, Bank of America, Citibank, JP Morgan Chase and Ally to spot violations of the Servicemembers’ Civil Relief Act, and its foreclosure provisions. The period under scrutiny extends from Jan 1. 2006 to April 4, 2012.
A far greater number of violations may be revealed after the audits of all five major mortgage services are completed by the DOJ.