Rockefeller Introduces Bill to Protect Soldiers from Foreclosure Abuses

June 21, 2012

Feature Image: Capitol 1WASHINGTON, D.C.— Chairman John D. (Jay) Rockefeller IV today said he will fight for passage of legislation to protect service members from losing their homes to banks and other lenders while they are deployed to battlefields in Iraq, Afghanistan or elsewhere.

Rockefeller said a bill he introduced would expand the laws that protect our military men and women from losing their home when they are defending the country or have recently returned from service.

“One of the promises we make to our troops overseas is that when you make extraordinary sacrifices for our country, we’ll protect you on the home front,” Rockefeller said. “The law says that if an active duty soldier gets into a dispute with his bank or his landlord, we give the soldier the benefit of the doubt. I hope we can take action this year to make sure our military personnel get the legal protections and the respect they deserve. The last thing our troops abroad should ever have to worry about is the financial security of their families waiting for them at home.”

Last summer, Rockefeller’s Committee held a forum on this issue where veterans and advocates told stories of problems under the current system, which has some protections for the military but not enough.

Rockefeller’s bill, S.3323, the Military Family Home Protection Act of 2012, mirrors a bill that was overwhelmingly approved by Democrats and Republicans in the House. That version was sponsored by Rep Elijah E. Cummings.

Chairman Rockefeller was joined in introducing the bill by Senator Ben Cardin. The bill would:

  • Provide mortgage foreclosure relief: The legislation expands the class of covered individuals under the Servicemembers Civil Relief Act’s (SCRA) mortgage provisions to include:
    • o All servicemembers serving on the battlefield, regardless of when they bought their home;
    • o Servicemembers who are 100% disabled at the time of discharge due to a service-connected injury; and
    • o Surviving spouses of servicemembers who died during military service.

  • Mandate a permanent 12 month stay of foreclosure proceedings: The legislation would repeal the sunset provision that is set to expire at the end of this year and would permanently increase the stay of proceeding period to 12 months for all covered individuals.

  • Increase civil penalties: The legislation would increase civil penalties for mortgage-related violations. The fine for a first-time violation would double from $55,000 to $110,000, and the fine for any subsequent violation would double from $110,000 to $220,000.

  • Improve compliance with the SCRA: The legislation protects servicemembers and their families against discrimination by banks and lenders by requiring banks and lenders to take steps to ensure compliance with the SCRA, including:
  • o Designate an employee as a SCRA compliance officer;
  • o Require SCRA compliance officers to distribute information to servicemembers about the protections afforded under the SCRA; and
  • o Provide a toll-free telephone number and website to assist servicemembers with coverage under the SCRA.

A 2011 bicameral staff report prepared for Chairman Rockefeller and Rep. Cummings, Ranking Member of the House Oversight and Government Reform Committee, showed that multiple mortgage servicing companies were violating the SCRA by illegally foreclosing on servicemembers and by charging interest rates in excess of the maximum amounts allowed under the SCRA. Chairman Rockefeller also convened a forum in the Senate Commerce Committee hearing room with Rep. Cummings to examine illegal foreclosures against servicemembers and their families.