United States Senator Kay R. Hagan (D-NC) yesterday cosponsored a bill to increase foreclosure protections for military personnel serving overseas and their families. Hagan is a member of the Senate Armed Services and Banking committees.
“This bill will ensure our servicemembers do not return home from war to find a foreclosure sign in their yard,” Hagan said. “North Carolina is the most military-friendly state in the nation, and it is our duty to protect our heroes and their families from wrongful foreclosures. I will work with my colleagues to advance this important bill in Congress this year.”
The Protecting Servicemembers from Mortgage Abuses Act of 2011 would incentivize financial institutions to comply with the Servicemembers Civil Relief Act (SCRA). Enacted in 2003, SCRA is intended to prevent active duty military from certain financial and legal hardships as a result of their absence due to military service. Unfortunately, financial institutions have repeatedly failed to comply with the SCRA. Major loan servicers have been responsible for mistakes that led to thousands of mortgage overcharges and a number of unlawful foreclosures and evictions.
During testimony in the House of Representatives earlier this month, an executive from J.P. Morgan Chase & Co. testified that the company “failed to comply with aspects of the law” in overcharging 4,500 servicemembers and improperly foreclosing on 18.
The bill would double the maximum criminal penalties for violations of its foreclosure and eviction protections. It would also double civil penalties in cases where the Attorney General has commenced a civil action. In addition, the bill will give servicemembers the time they need after returning from deployment to regain solid financial footing.
The bill was sponsored by Senator Sheldon Whitehouse, and, in addition to Hagan, it was cosponsored by Senators Jack Reed (D-RI), Jeff Merkley (D-OR), Bernie Sanders (I-VT) and Jon Tester (D-MT).