Servicemember Civil Relief Act

As you are aware, on August 26, 2014, President Obama, at a speech at the American Legion’s 96th National Convention, outlined how his Administration and five of the country’s largest mortgage servicers were working together to help more members of our active duty military lower their monthly mortgage payments. The initiative was to step up and go above and beyond what is required under the Servicemember Civil Relief Act (SCRA) and make sure our service members get the protections they deserve. The institutions agreed to work with the Department of Defense and other government agencies to proactively identify and reach out to eligible active duty service members to notify them of their benefits.

Following suit, Freddie Mac issued the following:

To facilitate SCRA relief, Servicers as of 8/26/14 are able to accept alternative documentation to verify an eligible Service member’s military status when copies of the official military orders are not readily available. This streamlines the process for Servicers to implement the financial protections and benefits offered by the SCRA and lowers barriers for Service members to meet documentation requirements to establish eligibility for certain SCRA protections.

Freddie Mac also is encouraging Servicers, who are not already doing so, to take steps to maximize the number of eligible borrowers who take advantage of the SCRA interest rate cap by considering adoption of the following practices:

  1. Query the Freddie Mac loans they service with Note Rates greater than 6% at least quarterly against the Defense Manpower Data Center web page found on https://www.dmdc.osd.mil/appj/scra/single_record.xhtml;
  2. Proactively solicit those Borrowers whom they identify and who are currently serving or projected to serve a Period of Military Service to inform them of their benefits under the SCRA and how they may take advantage of them.

Beginning January 1, 2015, Cenlar will begin proactively querying loans being serviced with note rates equal to or greater than 6% against the Defense Manpower Data Center (DMDC) website on a quarterly basis. In addition, Cenlar will also begin proactively querying foreclosure loans against the Defense Manpower Data Center (DMDC) website on a quarterly basis. This goes above and beyond our standard pre-foreclosure referral, at time of first legal action or service completion/pre-judgment and prior to scheduled sale milestone events.

In addition, for service members already receiving the SCRA Interest Rate Cap protections, while the interest rate cap is in effect, a quarterly DMDC website search will also be included in the quarterly checks to verify the service member is still in a period of military service or that no changes have been made to the duration/term of the period of military service that may affect the service member’s ability to receive relief.