WASHINGTON - two mortgage lenders will pay more than $ 22 million, combined to settle civil charges that they improperly barred on 178 military, some were used in wars in Iraq or Afghanistan.
Subsidiaries of Bank of America Corp. and Morgan Stanley failed to obtain court orders before imposing seizures between 2006 and 2009, the Department of Justice, said Thursday. Affairs will result in an average of $125,562 in payments per person. The seized homes have been in 22 States.
The regulation is "easily the largest amount recovered" for irregular military seizures, said Thomas e. Perez, Deputy Attorney General.
"Men and women who serve in the armed forces of our nation deserve, at least, to know that they will not have their houses taken illegally while they bravely put their lives on the line for their country,"Perez said. "
Among seizures on include several members of the service who had been injured or who suffers from post-traumatic stress disorder, officials said. One was a Iraq war veteran who was foreclosed in so that he was receiving counselling from nightmares and "nervous conditions" arising from his service.
The regulations, Perez said, lenders have agreed to create additional mortgage loan guarantees for military personnel.
The subsidiary of Bank of America, BAC home loans servicing, formerly Countrywide Home loans servicing and the subsidiary of Morgan Stanley, Saxon Mortgage Services, has also decided to consider possible cases of improper seizures as of Summer 2009 and 2010.
The Act that lenders were accused of having violated, Civil Relief Act of Servicemembers, offers protections to military personnel. Under the Act, they may not be expelled and the creditors cannot seize their property while they are in active service.
The Justice Department began its investigation earlier this year after separate investigations in the U.S. Marine Corps and Sergeant James Hurley, whose house in Hartford, Michigan, has been excluded on by Saxon in 2005 while he was in Iraq. Hurley moved with Saxon earlier this year for an undisclosed amount.
Case of foreclosure proceedings involving military personnel abroad started coming to light in 2005. Last month, based in New York JPMorgan Chase agreed to settle a class action for more than 60 millions of dollars. He was a Marine Corps captain who said that JPMorgan invoiced its military customers who took out mortgages with the Bank.
Earlier this year, JPMorgan acknowledged that he had charged about 4,000 members of service on mortgage loans and that it was foreclosed on 14 of them wrong. At the time, he paid $ 2 million to those who are affected and overthrown the seizures.
Federal officials say they are working to provide the most important financial protections for military families. A Federal Office devoted to military financial issues, the Servicemember Affairs Office, was launched in January and is to be incorporated in the Office of the financial Protection of newly created consumers.
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