While protecting our country, some servicemembers may have trouble meeting their financial obligations for a variety of reasons such as an unexpected activation, deployment, injury, or extension of service. The Servicemembers’ Civil Relief Act (SCRA) was enacted in 2003 to offer these servicemembers and their families special protections and benefits.
The SCRA covers all active duty servicemembers, Reservists, and the members of the National Guard while on active duty. The protection begins on the date of entering active duty and generally ends 30 to 90 days after the date when the servicemember is discharged from active duty.
If you are on active duty and have questions about the SCRA or the protections it offers, contact your unit judge advocate or installation legal assistance officer.
If you are the family member or dependents of an active duty servicemember and you have questions, or think you may be entitled to the protections and benefits of the SCRA, contact or visit your local military legal assistance office. To find your legal assistance office, visit http://legalassistance.law.af.mil/content/locator.php, and enter your zip code.
The SCRA limits the amount of interest a servicemember may be charged on his or her mortgage or other debt to 6 percent during periods of active service. The interest rate reduction only applies while the servicemember is on active duty, and any interest above 6 percent that would have been charged during that time may be forgiven. The original interest rate will apply once the servicemember is no longer on active duty.
To be eligible for this relief, the debt must exist before the servicemember’s activation date.
To request this temporary interest rate reduction, the servicemember must submit a written request and a copy of his or her military orders to the mortgage lender. The request may be submitted as soon as the orders are issued but must be provided to a mortgage lender no later than 180 days after the date the servicemember is released from active duty.
Some mortgage lenders may voluntarily allow servicemembers to stop making payments on their mortgage principal during active duty. Servicemembers who are unable to pay their mortgages at the reduced rate should contact their lenders to see if they offer other repayment options for military personnel. There are also a variety of general resources for homeowners who are unable to make their mortgage payments available on the U.S. Department of Housing and Urban Development website, http://www.hud.gov/offices/hsg/sfh/econ/econ.cfm.
Where the SCRA is applicable, mortgage lenders also may not foreclose upon, or seize property for a failure to pay a mortgage debt while a servicemember is on active duty or within 90 days after the period of military service unless they have the approval of a court. To obtain permission from the court to foreclose, the lender would have to show that the servicemember’s ability to repay the debt was not affected by his or her military service.
In February 2012, the U.S. Department of Justice’s Civil Rights Division announced a settlement agreement with several major home loan servicers. If you have been foreclosed on or charged a mortgage interest rate in violation of the SCRA, you may be entitled to compensation. The agreement may also provide access to loan modifications for servicemembers forced to move due to a permanent change of station (PCS). To learn more about the Justice Department’s enforcement of laws protecting servicemembers, visit www.servicemembers.gov. If you believe your rights under the SCRA have been violated, contact your nearest Armed Forces Legal Assistance Office (AFLA). http://legalassistance.law.af.mil/content/locator.php.
In April 2012, the Attorney General’s Office launched HomeCorps, a new initiative to prevent unnecessary foreclosures by increasing the number of loan modification specialists available to help distressed borrowers in Massachusetts. Learn more about HomeCorps at www.mass.gov/ago/homecorps. If you are facing foreclosure, you can call at 617-573-5333.
In most cases, a landlord cannot evict a servicemember or his or her dependents from their residence while the servicemember is on active duty, unless the landlord applies for a special court order. To be eligible for this protection, your monthly rent must be $2,831.13 or less (Note: this amount is updated annually to adjust for inflation and is current through 2008.) If your landlord applies for a court order to evict you or your family during your military service, the court can postpone the eviction for 90 days or however long the court determines is just. For more information, visit the U.S. Department of Housing and Urban Development website on the SCRA, http://188.8.131.52/offices/cpd/about/hudvet/library/scra.cfm, or contact your local veterans’ service officer.
A servicemember who signed a lease for residential, professional, business, agricultural, or similar purposes is entitled to terminate that lease if he or she enters active military service after signing the lease. A servicemember who signed a lease after entering active military service can terminate that lease if he or she receives orders for a permanent change of station or to deploy with a military unit for at least 90 days. To terminate a lease, the servicemember must provide the landlord or other lessor with at least 30 days written notice of the termination and a copy of the servicemember’s military orders.