Banks to Pay $22 Mil for Military Foreclosure

Bank of America and Morgan Stanley
have agreed to pay more than $22 million combined to settle federal civil
charges on improperly foreclosing on military personnel, The Associated Press

Between 2006 and 2009, the
mortgage lenders foreclosed on 178 military members in 22 states without getting
court approval. The military members affected will each receive $125,562, on
average. The banks will also continue to investigate whether improper
foreclosures occurred in 2009 through 2010.

The settlement is “easily the largest amount recovered” in a case of
improper military foreclosures, Thomas E. Perez, an assistant attorney general,
told The Associated Press.

Servicemembers’ Civil Relief Act offers protections to military personnel to
prevent foreclosures. It bans evictions or creditors trying to repossess their
property while on active duty.

Chase earlier this year admitted to overcharging about 4,000 military personnel
on mortgages and wrongly foreclosing on 14. It paid $2 million in settlement
charges originally and last month paid more than $60 million to settle a
class-action lawsuit regarding the overcharges.

Source: “2 Firms to Pay for Improper Military
Associated Press (May
26, 2011)