In recent days, the CFPB and the White House have made what looks like a coordinated effort to publicize the relief that military personnel will receive under the $25 billion settlement announced on February 9 between five leading bank mortgage servicers and a coalition of state attorneys general and federal agencies. Perhaps concerned they were not getting enough credit for this aspect of the settlement, new details about the impact of the settlement on military personnel were described in a post this week on the CFPB’s blog by Holly Petraeus, Assistant Director of the CFPB’s Office of Servicemembers Affairs, and in a fact sheet posted this week on the White House webpage.
According to the CFPB and White House, the relief to be provided by the five banks to servicemembers includes:
- A review of the file of any servicemember foreclosed upon since 2006 and compensation equal to a minimum of lost equity, plus interest and $116,785 to any servicemember who was wrongly foreclosed upon.
- A refund of money lost because a servicemember was wrongfully denied the opportunity to reduce his or her mortgage payments through a lower interest rate.
- A short-sale agreement and deficiency waiver to a servicemember forced to sell his or her home for less than the amount owed on his or her mortgage due to a Permanent Change in Station and who was not eligible for the military’s Homeowner’s Assistance Program.
- A $10 million payment to the Veterans Affairs fund that guarantees loans on favorable terms for veterans.
- An extension of certain foreclosure protections afforded under the Servicemembers Civil Relief Act to a servicemember serving in combat zone regardless of whether the mortgage loan was taken out before the servicemember began active duty.