Mortgage Companies Settle Suits on Military Foreclosures

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EDITOR’S NOTE: After years of revealing on this blog the many illegal foreclosures on property owned by service people who were on active duty, putting their lives on the line for their country, and laws that have long been in effect that such actions cannot be taken against military personnel, the banks are going to pay up for the damage they caused to the families of these brave souls. The simple fact is that the banks knew, we know they knew and they did it anyway because they didn’t care and they thought they could get away with it. It’s the same as all the other foreclosures with one important difference: this time they attacked not only the core of American society, they aimed at the core of our defense. To my way of thinking it is as close to treason as you can get without crossing the boundary.

Mortgage Companies Settle Suits on Military Foreclosures

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Two mortgage servicing companies have agreed to settle federal complaints that they wrongfully foreclosed on the homes of at least 178 military service members and to set aside a minimum of $22 million to compensate those victims.

The Justice Department announced on Thursday that it had simultaneously filed and settled lawsuits against the two companies — a subsidiary of Bank of America formerly known as Countrywide Home Loans Servicing, and Saxon Mortgage Services, a subsidiary of Morgan Stanley.

The companies were accused of knowingly and repeatedly violating the Servicemembers Civil Relief Act, a federal law that extends an array of financial and legal protections to military personnel. Specifically, the companies were accused of ignoring a provision of the law that required them to get court orders before foreclosing on active-duty service members.

Without admitting wrongdoing, the former Countrywide unit agreed to pay $20 million to approximately 160 victims of illegal foreclosures from January 2006 to May 2009. It also agreed to reimburse victims of any other illegal military foreclosures found to have occurred from May 2009 to the end of last year.

Further, it promised to upgrade its training and report future violations of the civil relief act to the Justice Department.

Although most of the improper foreclosures began before Bank of America acquired Countrywide, “it is our responsibility to make things right,” said Terry Laughlin, an executive vice president at the bank. He added, “These errors are not acceptable, and we certainly regret them.”

According to Thomas E. Perez, assistant attorney general for the Justice Department’s civil rights division, the Countrywide settlement is “easily the largest amount ever recovered“ by the Justice Department for violations of the civil relief act.

Saxon was accused of illegally foreclosing on approximately 18 service members, “some of whom were severely injured in the line of duty or suffer from post-traumatic stress disorder,“ according to Mr. Perez.

Without admitting wrongdoing, Saxon agreed to pay $2.35 million to victims of those foreclosures, made from January 2006 to May 2009. It also agreed to pay the victims of any subsequent wrongful military foreclosures, through the end of last year, and to upgrade its training programs.

“First and foremost, we want to apologize to those military families that were affected by any mistakes made in the foreclosure process,” said Mark Lake, a spokesman for Morgan Stanley. “Our servicemen and women deserve the highest level of customer service.”

He said that Saxon “has taken meaningful steps to ensure it has appropriate policies and procedures in place to comply fully” with the civil relief act.

Both companies agreed to repair any damage their improper foreclosures had caused to the credit scores of the affected homeowners.

There have been widely publicized violations of the civil relief act since well before January 2006, the starting date for these settlements. Indeed, the Saxon investigation was based on a complaint by Sgt. James B. Hurley, an Iraq veteran who lost his home in western Michigan in an improper foreclosure in 2005. Saxon and its co-defendant in that case, Deutsche Bank, reached a confidential out-of-court settlement with the Hurleys early this year.

Mr. Perez said the 2006-9 period was chosen because it encompassed the sharp spike in national foreclosure activity that began in late 2006.

The settlement terms expand that window to the end of 2010.

The two mortgage companies have set up a direct hot line for service personnel who believe they are eligible for relief under the settlements. That number is (800) 896-7743, mailbox 6 for the former Countrywide unit and mailbox 995 for Saxon.

6 Responses

  1. YES, E.Tolle! We should do the sequel to “Inside Job”…call it “Outside Job”…everybody on the “outside” storms the—not sure what we would storm—but anyway, storm the thieves’ lair with pitchforks and black powder, as you say—I’M READY!!!!

  2. Without admitting wrongdoing and with no one going to jail….same old crap. Pay a fee. Kinda’ like an overdue library book to these same bad actors…

    If Obama had a pair, even a tiny set, he’d force our lawmakers to stipulate that if you robo-sign, foreclose upon service members, foreclose without proof of standing, breach a mod, file a false affidavit, lie, cheat, steal, forge, falsely notarize, buy a foreclosure with a false credit arrangement, cause a homeowner to become late so as to rape them once the hope has dimmed and no one is looking, fill in the blank _________, that you’d be assured of receiving punishment that would guarantee staring at a stainless steel toilet bowl as your only piece of furniture besides your fixed to the wall metal cot.

    Screw these bankers. Let’s make sure that every waking moment is spent seeing to their failure and collapse. Don’t worry about the aftermath….that will for sure be rosier than the aftermath of TARP, TALF, and the trillions of other $$$ we sent their way with our hard earned tax monies.

    Obama and all of CONgress are complicit in all of these various crimes. Throw each and every one of the bums out next year. Fill the void with anyone who can tie their shoe without affiliation with the two parties bent on destroying what’s left of this once proud but dying nation.

    We’ve kicked this can down the road long enough. It’s time for black powder and pitchforks. Revolution 2.0.

    Or in Hollywood speak, America the Movie, the Sequal.

  3. While waiting to see my doctor at the Veteran Hospital today, a group of people entered the waiting room. They went around handind out cards and shaking hands of the veterans, card was a Happy Memorial Day Card. When the girl reached me i noticed her shirt had a Bank of America logo.
    I verbally let loose. Told her is is a sad state of affairs to try and steal someones home while on active duty, not to mention breaking a law. She almost shit herself. This was while they were posing for a picture of the rest of the group around a statue of Gen Patton. Some balls they have.

  4. The banks may be committing treason, but so are the rest of the giant corporations. All the mega corporations are destroying America and the constitution. Big Pharma, Big Agriculture, Big Banking (which is international and makes it even worse), Big Munitions (sell their weapons oversease to be used against Americans defending our freedom), Big Insurance which is up to its eyeballs in the foreclosure mess and healthcare mess. Big corporations running our government along with our elected representatives caving in and passing laws against America for money.

  5. Foreclosures like all the rest that should have never have taken place but most especially not to service members.Wonder how the banks would feel if the service said “in leiu of your foreclosure practices we choose not to defend your right to freedom.”Think that might get thier attention?Doubt it but its a nice idea!We need to bring critical mass to an end for everybody concerned.

  6. Oregonian must contact your State Senators and Congressmen ASAP. The banksters are trying to push thru an Amendment to the SB 519 that will allow them to foreclose without a properly recorded chain of title, Under the proposed amendment, past and future foreclosure sales with improperly recorded deeds could no longer be voided by a judge. Check out story at:

    http://blog.oregonlive.com/finance/2011/05/poll_should_legislature_give_m.html

    Plese contact your senator.

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