Local military families paid for foreclosure errors
Feb 12, 2015, 7:28 AM | Updated: Oct 10, 2024, 2:00 pm
Several large banks will pay $123.4 million to members of the military for violating a federal law that is to protect service members from foreclosures when they’re on active duty, the U.S. Department of Justice reported.
While Puget Sound area families were included, no official number was available.
The lenders have been accused of violating the Servicemembers Civil Relief Act, which prevents non-judicial foreclosures against service members who are on or recently left active duty. The foreclosures involved in the most recent settlement occurred between January 1, 2006, and April 4, 2012.
“Service members should never have to worry about losing their home to an illegal foreclosure while they are serving our country,” said Acting Associate Attorney General Stuart Delery in a press release.
The U.S. Department of Justice said that 666 service members and their co-borrowers will receive $88 million from JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and Ally Financial Inc. Another 286 members have already received about $35 million under a 2011 settlement with Bank of America Corp., the government reports.
Service members with mortgages serviced by Wells Fargo, Citi, and GMAC Mortgage will each receive $125,000, as well as any lost equity in the home and interest on the equity, the DOJ reported.
The DOJ also said that JP Morgan Chase has agreed to provide any affected service member the property free of any debt or the cash equivalent of the full value of the home at the time of sale. The bank will also allow any service member to submit a claim for compensation for any additional harm suffered.
