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

Strategic Insights -

The Justice Department has announced that 952 service members and their co-borrowers are eligible to receive over $123 million in compensation for non-judicial foreclosures that violated the Service Members Civil Relief Act. The settlements with five of the nation's largest mortgage servicers, including JP Morgan Chase, Wells Fargo, Citi, GMAC Mortgage, and Bank of America, will provide relief to those affected by unlawful foreclosures that took place between 2006 and 2012.

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 Service Members Civil Relief Act.
  • The five mortgage servicers involved in the settlements are JP Morgan Chase, Wells Fargo, Citi, GMAC Mortgage, and Bank of America.
  • The non-judicial foreclosures at issue took place between January 1, 2006, and April 4, 2012.
  • 666 service members and their co-borrowers will receive over $88 million from JP Morgan Chase, Wells Fargo, Citi, and GMAC Mortgage.
  • 286 service members and their co-borrowers have already received over $35 million from Bank of America through an earlier settlement.
  • The settlements will provide compensation to service members and their co-borrowers for lost equity in the property and interest on that equity.
  • Eligible co-borrowers will also be compensated for their share of any lost equity in the property.
  • Payment amounts have been reduced for those service members or co-borrowers who have previously received compensation directly from the servicer or through a prior settlement.

Statistics:

  • $123 million: total amount of compensation available to service members and their co-borrowers.
  • 952: number of service members and co-borrowers eligible for compensation.
  • 666: number of service members and co-borrowers who will receive over $88 million from JP Morgan Chase, Wells Fargo, Citi, and GMAC Mortgage.
  • $88 million: amount of compensation to be received by 666 service members and co-borrowers from JP Morgan Chase, Wells Fargo, Citi, and GMAC Mortgage.
  • 286: number of service members and co-borrowers who have already received over $35 million from Bank of America.
  • $35 million: amount of compensation already received by 286 service members and co-borrowers from Bank of America.
  • $125,000: amount of compensation to be received by each eligible service member for non-judicial foreclosures.

Sources:

  • Department of Defense American Forces Press Service
  • Justice Department
  • National Mortgage Settlement
  • Service Members Civil Relief Act
  • Financial Fraud Enforcement Task Force
  • President's Financial Fraud Enforcement Task Force