Homeowners' Protection Under SCRA
VR SAM continues to be inundated with stories of military families facing foreclosure and repeated deployments. One question that keeps surfacing is what relief can military members receive through the Service Members Civil Relief Act (SCRA) of 2003? We need to state a very important caveat: Relief under SCRA is a legal issue and those seeking relief should consult an attorney experienced in SCRA. Our intent is to highlight some of the provisions of the Act that pertain to real estate.
SCRA, formerly known as the Soldiers and Sailor's Civil Relief Act of 1940 (SSCRA), is a federal law that protects active-duty servicemembers. SCRA updated SSCRA and extends protections to active-duty Reservists and members of the National Guard called to active duty for 30 days or more, and in some circumstances, military dependents. Additionally, the Foreclosure Protection Act, passed by the Senate in April 2008, includes provisions under the Military Homes Protection Act to further expand the SCRA. The enhancement provides returning servicemembers with one year of relief from mortgage interest rate increases and extends protections from foreclosure from 90 days to nine months.
To receive protection under this act a servicemember needs to show that military service had a "material effect" on the legal or personal financial matters. Typically, protection under this act must be requested during the member's active duty or within 30-180 days after military duty ends. SCRA protections are not automatic and to receive protection the servicemember must invoke the Act. Clearly SCRA doesn?t relieve servicemembers from their legal or financial obligations but it can buy time to address the issues. The act also extends to various issues such as civil legal proceedings, insurance, rental agreements, security deposits, credit card interest rates, income tax payments, eviction and many more. If you feel that your legal right have been violated while under SCRA then you should seek the council of an attorney.
Here are two important housing SCRA provisions germane to deployed military members:
- Interest rates on mortgage payments incurred prior to entering service may be capped at 6 percent with any overage being forgiven, IF the service materially affected the member's ability to pay.
- Protection from eviction if your rent is $2,400 or less, adjusted by the CPI. Note the court has significant discretion in enforcing this and may effective garnish the servicemember's wages by allotment based on the Service Secretary's standards.
It bears repeating that the both the Foreclosure Protection and Military Homes Protection Acts of 2008 expanded and refined some of these protections primarily to deployed servicemembers. It should also be clear that the SCRA housing relief provisions are very limited and all aspects are subjected to judicial review. The complete SCRA law can easily be found through a simple Internet search.
Servicemembers who have questions about the SCRA or the protections should contact their unit judge advocate or installation legal assistance officer. Dependents of servicemembers can also contact or visit local military legal assistance offices where they reside. A military legal assistance office locator for each branch of the armed forces is available at http://legalassistance.law.af.mil/content/locator.php
We hope this helps and wish our military members and families a very Happy New Year!