Banks to Pay Military Members for Foreclosure Errors

Four major banks have agreed to reimburse any military members found to have been wrongfully foreclosed upon in the last five years.

The Justice Department will oversee the reviews by the banks. The financial institutions involved are JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial.

The banks will be conducting reviews of accounts dating back to Jan. 1, 2006, to find any military members who they may have mistakenly foreclosed upon — which violates the Servicemembers Civil Relief Act.

"From our first conversations, these servicers made it clear that they shared our goal of ensuring that any servicemember harmed as a result of a violation of the SCRA will receive full compensation," U.S. Assistant Attorney General Thomas Perez said in a speech Friday.

Two banks already have agreed to reimburse military members at least $116,785 each. They said they’ll also pay any lost equity in a home.

Some banks have already been compensating service members for wrongful foreclosures after allegations first surfaced nearly a year ago that violations of SCRA were made against military members by several banks. Chase has admitted to 14 wrongful evictions of military families and has agreed to give back the homes or offer compensation if the home was already resold. It has also developed a foreclosure prevention and assistance program for military vets. Bank of America has agreed to pay more than $20 million to 157 military members to correct wrongful evictions made from 2006 to 2009.

Source: “Military Members May Get Six-Figure Payday for Wrongful Foreclosures,” HousingWire (Feb. 13, 2012)