Justice Department Settles with Bank of America and Saxon Mortgage for Illegally Foreclosing on Servicemembers

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, May 26, 2011

Justice Department Settles with Bank of America and Saxon Mortgage for Illegally Foreclosing on Servicemembers

Settlement Includes a Minimum of $22 Million in Relief for Victims

WASHINGTON – The Justice Department today announced settlements with two lenders under the Servicemembers Civil Relief Act (SCRA) to resolve allegations that the lenders wrongfully foreclosed upon active duty servicemembers without first obtaining court orders, in violation of the SCRA. Combined, the settlements provide more than $22 million in monetary relief for the victims.

Under the first settlement , BAC Home Loans Servicing LP, formerly known as Countrywide Home Loans Servicing LP, a subsidiary of Bank of America Corporation, will pay $20 million to resolve a lawsuit alleging that Countrywide foreclosed on approximately 160 servicemembers between January 2006 and May 2009 without court orders.   In addition to the $20 million, Countrywide agreed to pay any servicemember wrongfully foreclosed in the period from June 2009 through 2010.  The complaint alleges that Countrywide did not consistently check the military status of borrowers on whom it foreclosed through at least May 31, 2009. The complaint was filed in the Central District of California, where Countrywide is headquartered.

Under the second settlement, Saxon Mortgage Services Inc., a subsidiary of Morgan Stanley, will pay $2.35 million to resolve a lawsuit alleging that Saxon foreclosed on approximately 17 servicemembers between January 2006 and June 2009 without court orders. In addition to the $2.35 million, Saxon agreed to pay any servicemember wrongfully foreclosed in the period from July 2009 through 2010.   The complaint alleges that Saxon failed to consistently or accurately check the military status of borrowers on whom it foreclosed through at least June 30, 2009.   The complaint was filed in the Northern District of Texas, where Saxon is headquartered.

“The men and women who serve our nation in the armed forces deserve, at the very least, to know that they will not have their homes taken from them wrongfully while they are bravely putting their lives on the line on behalf of their country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Department of Justice. “The Civil Rights Division is committed to aggressively enforcing those laws that protect the rights of servicemembers. All lenders have an obligation to do their part to work with servicemembers while these brave men and women focus on keeping us safe.   The Justice Department also thanks the Department of Defense for its critical assistance in identifying servicemembers whose rights were violated”

“Countrywide Home Loans failed to protect and respect the rights of our servicemembers, failed to comply with clearly mandated procedures and foreclosed against homeowners who are valiantly serving our nation,” said André Birotte Jr, U.S. Attorney for the Central District of California.   “Military families lost their homes when Countrywide violated the law, causing undue stress to wartime personnel who have been protected from such actions since the Civil War.”

“With the numerous sacrifices our servicemembers make while they are serving our country, the last thing they need to worry about is whether or not their families will be forced from their homes,” said James T. Jacks, U.S. Attorney for the Northern District of Texas. “These lenders’ callous disregard for the SCRA, a law which was designed to insulate these patriots from unlawful foreclosures and other civil and financial obligations while they are on active duty, is deplorable and I applaud the Department’s Civil Rights Division’s efforts in identifying and seeking remedies for these wronged service members.”

Of the approximately 160 servicemembers upon whom Countrywide foreclosed without obtaining court orders, Countrywide allegedly foreclosed in many instances where it knew, or should have known, about their military status.   The victims include individuals who have served honorably in Iraq and Afghanistan.   The Department of Justice initiated its SCRA investigation of Countrywide in response to a referral by the U.S. Marine Corps regarding an active duty servicemember who was facing foreclosure by Countrywide.

Under the consent decree, Countrywide will establish a settlement fund of $20 million to compensate the servicemembers upon whom Countrywide foreclosed between January 1, 2006, and May 31, 2009.   In addition to this settlement fund, Countrywide has agreed to compensate any additional SCRA-eligible individuals on whom Countrywide foreclosed without court orders between June 1, 2009, and Dec. 31, 2010.   The consent decree also requires numerous corrective measures, including SCRA training for Countrywide employees and agents, developing modified SCRA policies and procedures and referring future SCRA complaints to the Justice Department.   Countrywide will also repair any negative credit report entries related to the allegedly wrongful foreclosures and will not pursue any remaining amounts owed under the mortgages. Countrywide now will check the Defense Manpower Data Center’s website and its own files prior to conducting any foreclosure, and will not foreclose in violation of the SCRA if the borrower is in military service or is otherwise protected by the SCRA.

Of the approximately 18 servicemembers upon whom Saxon foreclosed without obtaining court orders, Saxon allegedly foreclosed on at least 10 servicemembers when Saxon knew or should have known about their military status.   The servicemembers Saxon foreclosed on include men and women who have served honorably in Iraq, some of whom were severely injured in the line of duty or suffer from post-traumatic stress disorder.   The Department of Justice initiated its SCRA investigation in response to an inquiry from Sergeant James Hurley, who resolved his claims against Saxon earlier this year in a confidential settlement.

Under the consent decree, Saxon will establish a settlement fund of $2.35 million to compensate the servicemembers upon whom Saxon allegedly wrongfully foreclosed between 2006 and 2009.   In addition to this settlement fund, Saxon also has agreed to compensate any additional SCRA-eligible servicemembers on whom Saxon foreclosed without court orders between July 1, 2009, and Dec. 31, 2010.   The consent decree also requires numerous corrective measures, including SCRA training for Saxon employees and agents, developing modified SCRA policies and procedures, and referring future SCRA complaints to the Justice Department.   Saxon will also repair any negative credit report entries related to the wrongful foreclosures and will not pursue any remaining amounts owing under the mortgages. Saxon now will check the Defense Manpower Data Center’s website and its own files prior to conducting any foreclosure, and will not foreclose in violation of the SCRA if the borrower is in military service or is otherwise protected by the SCRA.

The division’s SCRA investigations have resulted in litigation or settlements enforcing SCRA’s provisions for termination of residential lease agreements, protection against enforcement of storage liens on towed vehicles without court orders, reduction of interest rates to six percent on credit obligations, and a prohibition against paying pre-payment penalties on mortgage loans when a servicemember must move for military service.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.   The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.   The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.   For more information on the task force, visit www.stopfraud.gov .

Servicemembers and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office.   Please consult the military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator.   Additional information about the Justice Department’s enforcement of the SCRA and the other laws protecting servicemembers is available at www.servicemembers.gov.   Servicemembers who believe they may have been victims, can contact the banks directly at 1-800-896-7743, mailbox 6 for Countrywide or 1-800-896-7743, mailbox 995 for Saxon.

~

4closureFraud.org

Comments
13 Responses to “Justice Department Settles with Bank of America and Saxon Mortgage for Illegally Foreclosing on Servicemembers”
  1. DanJS says:

    It’s apparent to me why the banksters “settled” the fraudclosures against members of our military…. These are honorable men and women who have a sense of duty. They have been trained very well to defend their honor and the people of the USA.

    When these honor-driven warriors are discharged and they personally investigate the fraud perpetrated against them and their fellow veterans, there are likely to be “consequences” that could follow.

    The banksters realize full well history is replete with “revolts” led by disgruntled members of various national military forces.

    The banksters also know that men and women who have served their country honorably are capable of righting the personal and corporate “results” caused and continued by the dishonesty of unscrupulous banksters.

    After all, these trained warriors are fully capable of using weapons efficiently and of mounting successful campaigns to “liberate” fellow citizens and “reclaim territory” taken by an enemy…even if the “territory in enemy hands” is in the form of thousands of individual homesteads.

    It makes sense to extend a “sop” to any military families who have had their property taken and lives forever changed…… Maybe the “worse scenario” will not be visited upon the “leadership” of the enemy.

    Hopefully (the banksters surmise), this “sop settlement” will suffice to placate any possible anger and action by all veterans and their fellow servicemen and women, armed and/or joined by formerly discharged comrades.

  2. Matt says:

    You people are idiots. These foreclosures were system-driven screw ups, not intentional acts. Yes, they should make it right; no, no one should go to jail. I assume most of you are also not paying your mortgages despite your contractual — and, in my opinion and the opinion of most upstanding citizens — ethical obligation to do so? Shocker….

    • You should mask your ip address when searching from inside your law firm… LB&B

      Of course you would spew such nonsense…

      Your profile online…

      Represents individual and corporate clients, including banks, insurers, and reinsurers, in a wide variety of commercial litigation matters. Experience includes real estate, trust, contract, fraud, and insurance insolvency litigation. Has substantial experience representing financial institutions in litigation concerning distressed real estate development projects, lender liability, check fraud, guaranty disputes and letters of credit.

      Now go back and suck off of your banksters tit…

    • Javagold says:

      Matt, What an idiot you are !

  3. This is a good start, however all American families are victims of these criminals. It is appauling these unscrupulous crook took advantage of Americans fighting for our country. When I first heard of it I was angry beyond words. This is not their only dispicable crime. They are perpetrators of the very American families these soldiers were fighting for our rights, as our own country and countrymen are committing homeland economic terrorism against American families.

  4. pamelag says:

    statute of limitiations on bank robbery is 5 years??is that why they are dragging their feet?

  5. Wayne says:

    I am a Vietnam Vet … My son, Iraq war Veteran, two of my brothers Vietnam Vets also, My Dad and Grandfather World War 11 and World War 1 Vets …. Point here is We are all the same, Protected By Law, State and Federal ….. There are those in power who never put on a uniform and could give a rats ass about anyone of us regular working class people. There are those who have put on a uniform and are now Politicians and could care less of us. (Senator McCain) People have been lied to SWINDLED and FRAUDED and do you know what …… They all F’n KNOW. You see you can’t have all these posts and comments, Video’s and pictures for 3 years now and not know. Senator Michele Reagan of Arizona is just one of many who could give a crap about the homeowners not to mention our Attorney General of Arizona … While California and Utah are going forward .. we have sat still or have gone a step back.
    I want the people in power who swore to Serve and Protect the People and their Property to do just that …. it is what they are paid to do.
    Don’t this just piss you off ………… it should … even those who don’t know their in trouble … just might be.

  6. leapfrog says:

    I’m sick of puny settlements. I want to see PERP WALKS for these CEOs and executives who instructed their people to foreclose on the service members.

  7. debi J says:

    What does a settlement really mean? For our service men its about 135k each and that’s if the lawyers don’t get any thing. This is absurd. The banks blatantly disregard their servicing agreements and foreclose on family’s that are already facing deployment and they get 135k? Whoever wrote this settlement must have either been on crack or they are the take from the banks. This is another example of pure GREED. When are these BANK PIGS gonna get slaughtered. They need to lock up whoever accepted this as anything but more fraud and disregard for our military. I’m so sick of being sick over this crap. Wake up every body time to think a new way. Until we all come together and take a stand this will continue to our youth. Take your money out of BOA right now. Pull it!!! Run!! Go get it every drop u have left. Open up an acct at your credit union or hide the cash. Do anything but bank with them. The slap on the wrist countrywide got is laughable and it should be a red flag to investigate the negotiator or lawyer who drew up this indecend and deplorable agreement. God bless america —-the ones who are still deserving. Truly, The bankers gotta go. And its Directly to jail do not pass go —And take their corrupt servicers with them for GODs sake and ours. May the truth be told and the master minds of the master scheme must pay. If not who will ever want to follow the law? Its for every one even the bankers…..unless u want a wild west free for all and I’m sure the bankers won’t win then. ….just a thought. Debi–Boynton Beach FL 5613899339

  8. I am all for helping our military men. They certainly do deserve it. Just need to start hearing that the regular PUBLIC will get help . We are all citizens of the United States. The laws that protect the average Joe are being VIOLATED also and IGNORED by our GOVERNMENT.

  9. Maggie May says:

    SICK BATARDS!

Leave a Reply