The Justice Department announced a settlement with ""Bank of America"":http://www.bankofamerica.com and ""Saxon Mortgage"":http://www.saxononline.com to resolve allegations that the companies wrongfully foreclosed on active duty service members without obtaining court orders, a violation of the Servicemembers Civil Relief Act (SCRA). The combined settlements represent more than $22 million in monetary victim relief.
[IMAGE] ""The men and women who serve our nation in the armed forces deserve, at the very least, to know that they will not have their homes taken from them wrongfullyÃ¢â‚¬Â¦,"" said Thomas E. Perez, assistant attorney general for the Civil Rights Division of the Department of Justice. ""All lenders have an obligation to do their part to work with service members while these brave men and women focus on keeping us safe.""
Bank of America Home Loans Servicing LP, which absorbed Countrywide Home Loans after it was acquired by BofA, will pay $20 million to resolve a lawsuit alleging Countrywide foreclosed on approximately 160 service members between January 2006 and May 2009 without court orders.
The North Carolina-based lender also agreed to pay any SCRA-eligible service member wrongfully foreclosed[COLUMN_BREAK]
between June 2009 and December 2010. The federal complaint alleges that Countrywide did not consistently check the military status of borrowers before initiating foreclosures.
The consent decree also requires SCRA training for Bank of America employees and agents, the development of modified SCRA policies and procedures, and the referral of future SCRA complaints to the Justice Department. BofA will also repair negative credit report entries related to the wrongful foreclosures and will not pursue remaining amounts owed under the mortgages.
Texas-based Saxon Mortgage Services Inc., a subsidiary of ""Morgan Stanley"":http://www.morganstanley.com, will pay $2.35 million to resolve a lawsuit alleging Saxon foreclosed on approximately 17 service members between January 2006 and June 2009 without court orders.
In addition, Saxon has agreed to compensate any active service member wrongfully foreclosed between July 2009 and December 2010. According to the Department of Justice, Saxon foreclosed on at least 10 military personnel when the company knew or should have known about their military status.
Like the agreement with BofA, the consent decree requires Saxon to provide additional SCRA training for its employees, develop new internal SCRA policies and procedures, and involve the Justice Department directly on any future SCRA. Saxon will also fix any negative credit reporting related to the wrongful foreclosures and will forgo pursuing any outstanding amounts owed on the mortgages.
""With the numerous sacrifices our service members make while they are serving our country, the last thing they need to worry about is whether or not their families will be forced from their homes,"" said James T. Jacks, U.S. attorney for the Northern District of Texas.