Reports: Four Banks Seized Over 700 Military Homes
Four large U.S. banks seized more than 700 homes of active-duty military personnel after the housing bubble burst, their reports to regulators say.
The New York Times reported Monday that Bank of America, Wells Fargo, JPMorgan Chase, and Citigroup uncovered hundress of cases of wrongful foreclosures of military personnel that occurred between 2009 and 2010.
The Federal Reserve and Office of the Comptroller of the Currency had ordered the largest mortgage lenders to hire independent consultants to review mortgages after the controversy erupted in 2010 over banks hiring so-called foreclosure mills to handle a mountain of delinquent loans.
That review proved to be expensive and so slow that regulators moved to reach a settlement with the banks to provide relief for homeowners quickly.
But banks continued a review of loans to military personnel, looking for violations of the federal Servicemembers Federal Relief Act, which requires a court review of any foreclosures involving military personnel.
Reports were sent to regulators last week and are likely not to be released to the public because the numbers are vague and could be misinterpreted, the Times said.
Banks all along had contended that despite the mistakes made by foreclosure mills very few people were actually evicted wrongfully from their homes.
At this point, Bank of America and JP Morgan have reviewed more than 2 million loans.
But the banks all together have found only 20 cases of non-military personnel in which properties were foreclosed even though homeowners were current on their payments.
Other findings included over-charging lenders. But wrongful evictions among non-military loans were few, the banks reported.
Still, lawmakers could seize on the new reports and demand a tougher response than the settlement that included $3.6 billion in cash relief and $5.7 billion worth of other compensation for 4.2 million homeowners.
"It's absolutely devastating to be 7,000 miles from your home fighting for this country and get a message that your family is being evicted," Col. John S. Odom Jr., a retired Air Force lawyer who now represents military members in foreclosure cases, told the Times.
"We have been sounding the alarms that the banks are illegally evicting the very men and women who are out there fighting for this country. This is a devastating confirmation of that," he said.
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