You are hereAddicting Info: Bank Of America Wrongfully Foreclosed On Service Members: Will Now Pay In The Millions

Addicting Info: Bank Of America Wrongfully Foreclosed On Service Members: Will Now Pay In The Millions

-By Lorraine Devon Wilke

April 8, 2013- It’s been a long slog for a group of service members fighting to keep their homes while serving in the military of this great United States. Between the years of 2006 and 2010, a particular group of over 300 military members were served foreclosure notices, resulting in the accrual of greater debt, home equity lost, and the general stress of wondering if one’s home was going to be pulled out from under them while on active military duty.

The Justice Department didn’t like the sound of what was going on and got involved and in 2011, a settlement was reached with Bank of America to compensate 142 of those military members for wrongful foreclosures. A win, certainly, but the investigation continued and after the Bank of America handed over information about additional foreclosures made between mid-2009 and 2010, it became clear that 155 more service members had been impacted. The Justice Department added these parties to the settlement, making the amount Bank of America (and to a lesser extent, Morgan Stanley) will pay out for illegally foreclosing on 300+ service members the robust amount of $36.8 million. From Reuters:

Each of 316 service members will receive at least $116,785, plus compensation and with interest, for any home equity lost.

The payout follows the 2011 settlements the Justice Department reached with BAC Home Loans Servicing LP, a subsidiary of Bank of America, and Saxon Mortgage Servicing Inc, a subsidiary of Morgan Stanley, for alleged violations of the Servicemembers Civil Relief Act.

The Act allows members of the military to postpone or suspend certain financial obligations, such as outstanding credit card debt and mortgage payments.

“Our men and women in the military should not have to worry about a bank foreclosing on their home while they bravely serve our country,” Eric Halperin, Special Counsel for Fair Lending in the Civil Rights Division, said in a statement.



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