In an address to the American Legion on August 26, 2014, President Obama announced a new partnership with financial lenders across the country. This partnership will focus on delivering important financial and home loan-related protections for military members as they enter active duty. A preliminary analysis suggests that the partnership can save thousands of military families’ money on their mortgage payments by reducing their interest rates.
The 2003 Servicemembers Civil Relief Act (SCRA) offers financial protections to service members, such as capping mortgage interest rates at 6% when called up to active duty, but many do not know when or how they are entitled to these rights. Creating a partnership between the government and financial institutions will help cut red tape and streamline the delivery of these benefits that service members have earned.
Participating mortgage servicers have agreed to three key provisions:
- Proactively identify active duty personnel that have loans with them through official DOD systems;
- Proactively reach out to individuals that are identified as eligible for benefits under SCRA to notify them of their benefits;
- Simplify the application process to ease the burden of enrollment and satisfaction of the SCRA written notice requirement.
Homeownership is part of the “American Dream” for many and this partnership will help secure it for some service members. Although this partnership only includes a few mortgage servicers, service member rights under the SCRA haven’t changed. If you want to know more about your rights under the SCRA and if you’re eligible, contact your local Housing Service Center (HSC) or your local Navy Legal Services Office for more information.