More foreclosure protection could be coming to service members

The House will vote on a bill this week to give transitioning active duty service members a year long grace period on foreclosures.

Service members will be given extra protection from foreclosure as they transition back to civilian life from active duty if the House passes a bill scheduled for a vote this week.

The Foreclosure Relief and Extension for Service Members Act of 2015 will give those leaving active duty service a 12-month grace period from foreclosures if it becomes law.

Eligibility for the grace period will last through the end of 2017.

The Senate already unanimously passed the bill back in December.

“Some of the men and women who’ve served our country need time to find their financial footing as they leave active service.  They should get it,” Sen. Sheldon Whitehouse (D-R.I), who sponsored the bill said after its passage.  “Our service members keep us safe from all manner of threats around the globe.  It’s the least we can do to keep them and their families safe from foreclosure as they transition back to civilian life.

Congress passed a similar law in 2014, but the benefits of the bill expired at the end of 2015. As of 2016, the foreclosure grace period for transitioning service members reverted to 90 days.

A 2008 Commission on the National Guard and Reserves found one area of particular concern to service members is mortgage foreclosure.

“Reservists face considerable stress when they return from deployment; while some of those stressors are unavoidable, service members can be given more time to deal with the threat of foreclosure,” the report stated. “Finding a job, climbing out of debt, and dealing with both the physical and mental aftermath of service are all stressors, and the threat of foreclosure could likely add to the strain. The rates of post-traumatic stress disorder among combat veterans returning from Operations Iraqi Freedom and Enduring Freedom are significant.  The threat of foreclosure is a stressor that need not be placed on members of the armed forces during the first months of their return to civilian life.”

The Service Members Civil Relief Act (SCRA) gives those returning from duty the original 90 day grace period from foreclosure. The Commission recommended increasing that 90 day period.

Last year, five of the nation’s biggest mortgage servicers, including J.P. Morgan Chase and Wells Fargo, were forced to pay more than $120 million to nearly 1,000 service members for violating SCRA. Those foreclosures took place between 2006 and 2014.

If the new foreclosure bill is passed by the House this week, it will still require the signature of the President before it becomes law.

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