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SCRA and Foreclosures

posted by Adam Levitin

The more we learn about the mortgage servicing settlement, the more rotten it's looking. I really didn't think it was possible, but this piece in the New York Times details more problems, including with Servicemembers Civil Relief Act (SCRA) violations in the form of foreclosures on active duty military members.  

I'm still trying to wrap my head around how mortgage servicers have been violating SCRA. This should be one of the easiest darn things for servicers to comply with. The Department of Defense runs a free SCRA database. It's really easy to run a SCRA check prior to commencing a foreclosure. The total transaction costs of doing the search are virtually zero--a couple minutes of time from a high school graduate is all that is necessary.  The fact that this doesn't seem to have happened in way too many cases is a sign of how bad compliance has been in the servicing space. 


They call it "willful blindness".

They wouldn't look if they were afraid of what they would find.

As long as they don't look, then they don't know.

You would have to argue what they "should have known", right?

That would be an affirmative argument. Right?

So, Mr. Levitan, now that the "winners" of the foreclosure jackpot have been announced (in abstract anyway) and 99.9% if those who will be receiving the "grand prize" of $125k are servicemembers who lost their houses, I have a question for you. Was justice served? Because while I hate the idea that people who were serving our country, and who had specific legal protection from foreclosures lost their houses anyway, I also hate that all the rest of us poor slobs who lost our houses get bupkis because, well,we don't really have a law protecting us and, anyway, we should have been in the army??? Is that a legit rationale? I thought the Constitution and hundreds of years of property rights law protected all of us, but I guess I was mistaken. Only military personnel have rights. Who knew?

Again, to be clear, I am not saying I wish servicemen did NOT have rights and had NOT been given this money (far from it). What I am saying is, don't we all have rights? What about the citizens?

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