regarding mortgage payment relief and protection from foreclosure
provided by the Servicemembers Civil Relief Act (formerly known
as The Soldiers' and Sailors' Civil Relief Act of 1940).
Who
Is Eligible?
The
provisions of the Act apply to active duty military personnel who
had a mortgage obligation prior to enlistment or prior to being
ordered to active duty. This includes members of the Army, Navy,
Marine Corps, Air Force, Coast Guard; commissioned officers of the
Public Health Service and the National Oceanic and Atmospheric Administration
who are engaged in active service; reservists ordered to report
for military service; persons ordered to report for induction under
the Military Selective Service Act; and guardsmen called to active
service for more than 30 consecutive days. In limited situations,
dependents of servicemembers are also entitled to protections.
Am
I Entitled To Debt Payment Relief?
The
Act limits the interest that may be charged on mortgages incurred
by a service member (including debts incurred jointly with a spouse)
before he or she entered into active military service. Mortgage
lenders must, at your request, reduce the interest rate to no more
than six percent per year during the period of active military service
and recalculate your payments to reflect the lower rate. This provision
applies to both conventional and government-insured mortgages.
Is
The Interest Rate Limitation Automatic?
No.
To request this temporary interest rate reduction, you must submit
a written request to your mortgage lender and include a copy of
your military orders. 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 of your release from active duty military
service.
Am
I Eligible Even if I Can Afford To Pay My Mortgage At A Higher Interest
Rate?
If a mortgage lender believes that military service has not affected
your ability to repay your mortgage, they have the right to ask
a court to grant relief from the interest rate reduction. This is
not very common.
What
If I Can't Afford to Pay My Mortgage Even At the Lower Rate?
Your
mortgage lender may allow you to stop paying the principal amount
due on your loan during the period of active duty service. Lenders
are not required to do this but they generally try to work with
service members to keep them in their homes. You will still owe
this amount but will not have to repay it until after your complete
your active duty service.
Additionally,
most lenders have other programs to assist borrowers who cannot
make their mortgage payments. If you or your spouse find yourself
in this position at any time before or after active duty service,
contact your lender immediately and ask about loss mitigation options.
Borrowers with FHA insured loans who are having difficulty making
mortgage payments may also be eligible for special forbearance and
other loss mitigation options. More information about help for homeowners
who are unable to make payments on a mortgage is available on the
HUD website at http://www.hud.gov/offices/hsg/sfh/econ/econ.cfm.
Am
I Protected against Foreclosure?
Mortgage
lenders may not foreclose, or seize property for a failure to pay
a mortgage debt, while a service member is on active duty or within
90 days after the period of military service unless they have the
approval of a court. In a court proceeding, the lender would be
required to show that the service member's ability to repay the
debt was not affected by his or her military service.
What
Information Do I Need To Provide To My Lender?
When
you or your representative contact your mortgage lender, you should
provide the following information:
|
Notice
that you have been called to active duty; |
|
A
copy of the orders from the military notifying you of your activation; |
|
Your
FHA case number; and |
|
Evidence
that the debt precedes your activation date. |
HUD
has reminded FHA lenders of their obligation to follow the Act.
If notified that a borrower is on active military duty, the lender
must advise the borrower or representative of the adjusted amount
due, provide adjusted coupons or billings, and ensure that the adjusted
payments are not returned as insufficient payments.
Will My Payments Change Later? Will I Need To Pay Back The Interest
Rate "Subsidy" At A Later Date?
The
change in interest rate is not a subsidy. Interest in excess of
6 percent per year that would otherwise have been charged is forgiven.
However, the reduction in the interest rate and monthly payment
amount only applies during the period of active duty. Once the period
of active military service ends, the interest rate will revert back
to the original interest rate, and the payment will be recalculated
accordingly.
How
Long Does The Benefit Last? Does The Period Begin And End With My
Tour Of Duty?
Interest
rate reductions are only for the period of active military service.
Other benefits, such as postponement of monthly principal payments
on the loan and restrictions on foreclosure may begin immediately
upon assignment to active military service and end on the third
month following the term of active duty assignment.
How
Can I Learn More About Relief Available To Active Duty Military
Personnel?
Read more information about the
Servicemembers Civil Relief Act, sponsored by the Legal Assistance
Policy Division, Office of The Judge Advocate General, U.S. Army.
Servicemembers
who have questions about the SCRA or the protections that they may
be entitled to may contact their unit judge advocate or installation
legal assistance officer. Dependents of servicemembers can also
contact or visit local military legal assistance offices where they
reside. A military legal assistance office locator for each branch
of the armed forces is available at http://legalassistance.law.af.mil/content/locator.php
|