The nation’s biggest banks have agreed to pay more than $100 million to settle charges they unlawfully foreclosed on nearly a thousand service members.
As part of the national mortgage settlement announced in 2012, servicers agreed to pay more than $123 million to service members whose homes were wrongly foreclosed.
This portion of the servicer settlement was for alleged violations of the Servicemembers Civil Relief Act. The alleged abuses took place between 2006 and 2012.
According to an announcement Monday from the Department of Justice, foreclosures on borrowers who are in the military or within an applicable post-service period are prohibited as long as the loan was closed before they started their military service.
In all, 952 service members are receiving the funds.
A round of payments totaling $88 million
is being disbursed to 666 service members and their co-borrowers. Paying this amount is JP Morgan Chase Bank, N.A.; Wells Fargo & Co.; Citibank, N.A.; and GMAC Mortgage.
In addition to each receiving $125,000, service members will also be compensated for lost equity.
Another $35.4 million has already been paid out by BAC Home Loans Servicing LP.
“While this compensation will provide a measure of relief, the fact is that service members should never have to worry about losing their home to an illegal foreclosure while they are serving our country,” Acting Associate Attorney General Stuart F. Delery said in the announcement.
