Major U.S. banks have agreed to compensate service members for illegally foreclosing on their homes.
Improperly foreclosed vets will get a minimum of $116,785 under a settlement between the Justice Department and the nation’s largest banks.
The settlement provides compensation that’s more than 50 times greater than the $2,000 provided to those who lost their homes to robo-signing under the just-announced $25 billion deal between major banks and most states.
The gap between the service member’s agreement and the much-publicized robo-signing settlement will surely be noticed. What’s called the mortgage defense bar will point to the vet accord when seeking bigger damages in cases of alleged lender wrongdoing.
The Servicemembers Civil Relief Act, or SCRA, limits the interest rate that can be charged to service members and stops foreclosures without court approval.
“JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial have agreed to conduct a full review, overseen by the Department of Justice’s Civil Rights Division, to determine whether any service members were foreclosed on in violation of the SCRA since Jan.1, 2006. Wells Fargo, Citigroup and Ally will be required to provide any service member who was a victim of a wrongful foreclosure a minimum payment of $116,785 plus the service member’s lost equity. The service member’s payment could be higher as a result of the review conducted by the banking regulators,” according to the Justice Department.
Also, “JP Morgan Chase will provide any service member who was a victim of a wrongful foreclosure either his or her home free and clear of any debt or the cash equivalent of the full value of the home at the time of sale. In addition, servicemembers will receive compensation for any additional harm suffered.”
Previously, Bank of America had agreed to pay $20 million to 157 servicemembers who allegedly were wrongfully foreclosed on between 2006 and mid-2009.
Claims under the new agreement can go back as far as Jan. 1, 2006. Service members who believe their rights were violated by a lender or servicer can contact the Justice Department directly at 1-800-896-7743.
Photo courtesy of respres
