The settlement reached last week between federal and state officials and the nation's five largest servicers includes specific provisions for U.S. military members wrongfully harmed by their mortgage servicer.[IMAGE]
Four of the five banks participating in the settlement Ã¢â‚¬" JPMorgan Chase, Wells Fargo, Citigroup, and Ally - will review foreclosures of military members since January 2006, identifying instances of violation of the Servicemembers Civil Relief Act, according to the Department of Justice (DOJ).
The reviews will be conducted under the observance of the DOJ's Civil Rights Division.
Wells Fargo, Citigroup, and Ally agreed to compensate servicemembers a minimum of $116,785 in instances of wrongful foreclosure. They will also reimburse the servicemembers for lost equity.
In instances of wrongful foreclosure, JPMorgan Chase will allow servicemembers to return to their homes and eliminate any debt on the homeowner's record, or the servicemember will be paid the full value of his or her home at the time of sale.
These stipulations are part of a previous settlement JPMorgan Chase reached regarding wrongful foreclosures of military members.[COLUMN_BREAK]
Additionally, Citigroup, Wells Fargo, and Ally will compensate military members whose interest rates are above 6 percent and have been wrongfully denied refinancing to lower rates.
JPMorgan Chase has already done so as part of its previous settlement.
All relief provided to servicemembers through the provisions stated in the settlement are in addition to the $25 billion the banks will pay in penalties and borrower relief.
""The men and women who serve our nation in the armed forces deserve, at the very least, to know that we will protect their rights while they are serving our country,"" said Thomas E. Perez, assistant attorney general for the DOJ Civil Rights Division.
""We appreciate that Wells Fargo, JP Morgan Chase, Citigroup and Ally agreed, through this settlement, to compensate servicemembers whose rights were violated,"" Perez stated.
Bank of America, the fifth bank in the national settlement, worked out a $20 million settlement with the DOJ in May 2011 regarding some instances of wrongful foreclosure on military members.
The federal and multi-state settlement does not require BofA to review military foreclosures or interest rates, according to the DOJ.
""I urge financial institutions to pay heed to these provisions and ensure that our men and women in uniform have better options than accepting foreclosure or leaving their families behind when they go to their next multi-year assignment,"" said Holly Petraeus, assistant director for the Consumer Financial Protection Bureau's Office of Servicemember Affairs in a press briefing Friday.
""I hope this agreement will help bring peace of mind to military families who have been struggling with housing-related challenges, and I will continue to advocate for strong consumer-protection measures for servicemembers, veterans, and their families,"" Petraeus added.