In an effort to more effectively protect active military members and their families from foreclosures and better enforce SCRA (Servicemembers Civil Relief Act), which requires lenders to provide active duty military members to mortgage relief including lower interest rates and foreclosure protection during war time, the U.S. Department of Housing and Urban Development (HUD) has issued revisions to SCRA just in time for the 4th of July[1]. These revisions include requiring that service members on active duty be allowed interest rate reductions of not more than 6 percent and also allows courts to stop foreclosure proceedings or adjust debt should foreclosure action be taken against military personnel[2]. This means that not only must a lender obtain a court order in order to foreclosure on an active military member, but that when the lender seeks that court order the debt can be adjusted or the court can simply opt to halt the process.
SCRA is an “expanded and improved” version of the former Soldiers’ and Sailors’ Civil Relief Act (SSCRA) that is intended to “postpone or suspend certain civil obligations to enable service members to devote full attention to duty and relieve stress on the family members of those deployed service members”[3]. SCRA not only protects active duty military members from foreclosure during war time, but also may protect against outstanding credit card debt, pending trials, taxes and terminations of lease.
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[1] http://nationalmortgageprofessional.com/news25707/hud-issues-steps-protect-active-military-disclosure
[2] http://loanrateupdate.com/mortgages/hud-revises-notice-of-disclosure-for-service-members
[3] http://www.military.com/benefits/legal-matters/scra/overview
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