Banks Foreclose on Military Families
- Image by Beverly & Pack via Flickr
It is happening too often. Banks are foreclosing on too many military families. The Servicemembers Civil Relief Act is supposed to protect our men and women while they are on active duty. The last thing we want our men and women to think about is losing their homes while they are fighting our enemies in a foreign land.
Last week JP Morgan Chase admitted to wrongfully foreclosing on 14 military families and overcharging about 4,000 families. Under the Servicemembers Civil Relief Act (SCRA) the most a lender can charge on a mortgage is 6%. The bank said this was a mistake and will refund $2 million to the families. All this improper activity has lead Federal Prosecutors to launch an investigation.
Deutshce Bank also ran into problems when they foreclosed on military families. The bank foreclosed on a Michigan home, forcing the family of four to seek shelter with family and friends. The bank sold the house for $76,000.
In March 2009 a federal judge ruled that the foreclosure violated federal law. In simple terms the foreclosure was illegal. Remember that the foreclosure took place in 2004. So why is Sergeant Hurley, of the US Army, still fighting for his house?
“There is a fundamental disagreement over damages” was the response from the bank’s camp. There are too many cooks in the kitchen in this case. Saxon Mortgage is the lead in this case. This company services the mortgages. Saxon Mortgage is a subsidiary of Morgan Stanley and Morgan Stanley is the co-defendant with Deutshce Bank.
The bank wants to pay what the house is worth in today’s market. There is nothing fundamentally wrong with this argument. We all see what the recession has done to house values. So why not screw a soldier and his family.
Sgt. Hurley’s lawyers want punitive damages and rightfully so. This is the only way that banks will get the message. The law applies to everyone!
What is interesting in the two cases, JP Morgan Chase and Deutshce Bank, is how the law and our service men and women are viewed. JP Morgan Chase did the right thing. They issued refunds and reversed the foreclosures. Deutshce Bank on the other hand is willing to fight and prolong the issue.
My take on these specific cases is very simple. You break the law you pay a fine. The fine should be set at a minimum of $30,000. You break the law 10 times that’s $300,000.
The mindset of Deutshce Bank is similar to a shoplifter. He steals a loaf of bread and gets caught. So he gives the bread back and says “sorry”. This bank steals a house and doesn’t even want to say “sorry”. And they are still hanging onto the house.
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Add comment January 30th, 2011
