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How the SCRA Protects Servicemembers from Mortgage Foreclosures

The Servicemembers Civil Relief Act (SCRA) extends certain legal protections to active-duty U.S. military personnel who are in danger of losing their homes to foreclosure. Although it does not relieve servicemembers from their mortgage-related obligations entirely, it does grant them enough time to address any issues.

Here are the ways that the SCRA can help ensure that defending the country does not cause servicemembers and their families to lose their homes:

1.  Mortgages filed before active duty are protected. Military personnel who obtained their mortgage prior to active duty (known as a “pre-service mortgage”) are protected from foreclosure, sale, or seizure during their period of military service and nine months afterwards, unless:

  • The court approves the foreclosure, OR
  • The borrower provides a written waiver allowing a foreclosure to proceed

2.  Mortgages filed after active duty are protected. If a servicemember takes out a mortgage after going on active duty, a default judgment cannot typically be entered against them in a foreclosure action during their period of active duty unless the mortgagor consents or the court issues an order allowing the foreclosure to proceed.

3.  Absent servicemembers have their interests protected automatically. If a mortgage lender seeks a default judgment against an absent servicemember who has not waived their rights, an attorney is generally appointed by the court to represent them. This attorney will often seek a minimum 90-day stay of proceedings if there is a potential defense that can only be presented in the servicemember’s presence or the servicemember cannot be located to determine if a defense exists.

4.  Default judgments may be reopened later. If a default judgment occurs during the mortgagor’s period of military service or within 60 days after release, they may be able to reopen the case if they can demonstrate that military service affected their ability to defend themselves and they have a valid defense to the claim. Servicemembers must file a request to reopen a judgment within 90 days after their military service ended.

5.  Mortgage interest rates can be reduced. The SCRA allows servicemembers to request a mortgage interest rate reduction to 6% (including fees and service charges) for their entire period of active duty and one year afterwards. This request must be made within 180 days following the active-duty termination or release date.

The foreclosure protections apply whether or not the mortgage lender was informed about the applicant’s military status. It is always the obligation of a foreclosing lender to determine the military status of a mortgagor.

The SCRA provides special and necessary protections to members of the U.S. military but not all lenders will, intentionally or otherwise, respect them. If your lender attempts to foreclose on you and your family during or soon after a period of active duty military service, Bell Law will protect your rights throughout Missouri and see justice done.To schedule a case review, contact Bell Law today.

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