Justice Department Announces $123 Million in Compensation for Service Members Affected by Unlawful Non-Judicial Foreclosures

Strategic Insights -

The U.S. Department of Justice announced today that under its settlements with five of the nation's largest mortgage servicers, 952 service members and their co-borrowers are eligible to receive over $123 million for non-judicial foreclosures that violated the Servicemembers Civil Relief Act (SCRA). The five mortgage servicers involved in the settlements are JP Morgan Chase Bank N.A., Wells Fargo Bank N.A. and Wells Fargo and Co., Citi Residential Lending Inc., Citibank, NA and CitiMortgage Inc., GMAC Mortgage, LLC, Ally Financial Inc. and Residential Capital LLC, and BAC Home Loans Servicing LP formerly known as Countrywide Home Loans Servicing LP.

The settlements are part of the National Mortgage Settlement (NMS), which was announced in 2012. According to the Justice Department, the non-judicial foreclosures at issue took place between Jan. 1, 2006, and Apr. 4, 2012. The department estimates that the average payment for each service member or co-borrower will be around $129,000.

Key Takeaways:

  • 952 service members and their co-borrowers are eligible to receive over $123 million in compensation for non-judicial foreclosures that violated the SCRA.
  • The average payment for each service member or co-borrower is estimated to be around $129,000.
  • The settlements involve five of the nation's largest mortgage servicers: JP Morgan Chase Bank N.A., Wells Fargo Bank N.A. and Wells Fargo and Co., Citi Residential Lending Inc., Citibank, NA and CitiMortgage Inc., GMAC Mortgage, LLC, Ally Financial Inc. and Residential Capital LLC, and BAC Home Loans Servicing LP formerly known as Countrywide Home Loans Servicing LP.
  • The non-judicial foreclosures at issue took place between Jan. 1, 2006, and Apr. 4, 2012.
  • The department will continue to actively protect service members and their families from unjust actions.
  • The settlements are part of the National Mortgage Settlement (NMS), which was announced in 2012.
  • Service members and their dependents who believe that their SCRA rights have been violated should contact an Armed Forces Legal Assistance office.

Statistics:

  • Total amount of money to be distributed: $123,397,624
  • Number of service members eligible for compensation: 952
  • Total number of borrowers: 952
  • Average payment per service member or co-borrower: $129,000
  • Total number of mortgage servicers involved: 5
  • Total number of non-judicial foreclosures at issue: 952

Sources:

  • U.S. Department of Justice press release (no date)
  • National Mortgage Settlement (NMS) document (2012)
  • Servicemembers Civil Relief Act (SCRA) document
  • Office of the Comptroller of the Currency and Federal Reserve Board document (2011)