Banks May Have Illegally Foreclosed on 5,000 Active-Duty U.S. Military Members
New data from a federal regulator has revealed that 10 major U.S. banks may have illegally foreclosed on nearly 5,000 active-duty U.S. military service members.
According to the Financial Times, the Office of the Comptroller of the Currency (OCC), the federal agency that regulates national banks, released data showing that ten lenders, including Bank of America, Wells Fargo, Citigroup and others, are currently reviewing nearly 5,000 home foreclosures involving U.S. troops and their families to determine whether or not they are legal.
The Servicemembers Civil Relief Act of 2003 was enacted to protect active-duty military personnel from financial hardship, establishing special procedures that banks must follow when foreclosing on the homes of service members and their families. Among the restrictions under the Act are rules limiting default judgments in which homes are foreclosed on after the borrower fails to appear in court.
Despite the protections afforded by the Act, thousands of active-duty troops have lost their homes while deployed overseas.
The breakdown of lenders reviewing foreclosures as revealed by the OCC data:
- Bank of America– 2,400 foreclosures.
- Wells Fargo– 870 foreclosures.
- Citigroup– 700 foreclosures.
- OneWest– 575 foreclosures.
- HSBC– 87 foreclosures.
- US Bancorp– 80 foreclosures.
- Aurora– 56 foreclosures.
- MetLife– 25 foreclosures.
- Sovereign– 6 foreclosures.
- EverBank– 3 foreclosures.
This problem is not new. Earlier this year, Bank of America and Morgan Stanley settled with the Justice Department for more than $20 million over claims the banks illegally foreclosed on more than 175 active-duty troops. JPMorgan also reached a $27 million class-action settlement with 6,000 active-duty military members in April over 27 wrongful foreclosures. And Bank of America, facing a government lawsuit over 160 illegal foreclosures, agreed to pay each service member they wronged a minimum of $116,785 as well as compensation for lost equity.
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