Joint letters put landlords, mortgage servicers on notice about military servicemembers housing protections

Landlords and mortgage servicers with military servicemembers and veterans as tenants and clients were put on notice about housing protections in letters sent Monday by the federal consumer financial protection and top federal law enforcement agencies.

In their joint letters, the Consumer Financial Protection Bureau (CFPB) and the Justice Department said they reminded landlords and mortgage servicers of important legal housing protections for military families.

The letter to landlords and other housing providers, the agencies said, reminds property owners of the important housing protections for military tenants, “some of whom may have had to relocate or make other changes to their housing arrangements in response to the crisis,” the agencies said. “While military families enjoy the same legal protections and privileges afforded to all other homeowners and tenants, they also have additional housing protections under the Servicemembers Civil Relief Act (SCRA), which is enforceable by the DOJ and servicemembers themselves.”

The letter to mortgage service providers, the agencies said, was issued in response to complaints from military families and veterans on a range of potential mortgage servicing violations. Those included, the agencies said, inaccurate credit reporting, misleading communications to borrowers, and required lump-sum payments for reinstating their mortgage loans.

These complaints are being reviewed for compliance by the CFPB with the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 and other applicable requirements, the agencies said.

The agencies said approximately 1.25 million borrowers – including military borrowers – remain in forbearance programs that will expire at year’s end. “Ensuring that mortgage servicers comply with their legal obligations is crucial, especially since a decade ago some large financial institutions illegally seized the homes of military families, sending their lives into a tailspin,” the agencies stated. “These violations were a result of breakdowns in the mortgage servicing industry that were severe and widespread. The result was numerous settlements with regulators, including a $186 million settlement between DOJ and some of the country’s largest mortgage servicers.”

CFPB and DOJ Put Landlords and Mortgage Servicers on Notice About Servicemembers’ and Veterans’ Rights