MBA, Trade Groups Urge Extension of Servicemember Relief Act Foreclosure Protections
The Mortgage Bankers Association and a half-dozen industry trade groups sent a letter to leadership of the House Financial Services and House Armed Services Committees, urging them to support legislation that restores and extends a one-year extension of foreclosure protections for members of the armed services.
At the end of 2015, foreclosure protections passed by Congress in 2014 under the Servicemembers Civil Relief Act, known as SCRA, reverted from one year of protection from foreclosure actions to just 90 days. The letter notes that “mortgage servicers are very concerned they will have to reverse policy and communicate to military homeowners a change in their foreclosure protection in the next thirty days.”
“Congress extended the foreclosure protection to one-year to allow service members and military families sufficient time to get on their feet financially and to avoid the stress of potentially losing their home as they manage their finances in a post-active military life,” the letter said. “Some service members, particularly those leaving active-duty and re-acclimating to civilian life, continue to face real financial challenges. These very real challenges in transitioning from active-duty service to civilian life remain today. Additionally, slow recoveries in real-estate markets in some areas of the country, particularly in areas surrounding military bases, continue and make it difficult for military members to sell their homes or purchase new homes upon receiving new orders resulting from a Permanent Change of Station.”
The letter noted many of the signees’ member companies established the one-year protection from foreclosure as bedrock company policy and that restoring the protection to one-year and extending it through 2017 allays unnecessary confusion in the mortgage market and amongst service members that benefit from the protection. “Restoring and extending the one-year protection will also prevent unnecessary reputational harm to the industry,” the letter said. “We collectively and firmly maintain that this is good public policy and will provide uniform treatment for service members.”
The letter urged House members to approve S. 2393(https://www.congress.gov/search?q={“source”:”legislation”,”congress”:”114″,”search”:”S2393″}), which extends the one-year protection from foreclosure through 2017. The Senate approved S.2393 by unanimous consent last year. The bill also has strong support from numerous veterans’ groups.
Joining MBA in the letter: the American Bankers Association; the Association of Military Banks of America; the Consumer Bankers Association; the Consumer Mortgage Coalition; the Housing Policy Council of the Financial Services Roundtable; the Independent Community Bankers of America; the National Association of Realtors; and the National Association of Home Builders.
