Real Estate Law Affects Servicemembers and Spouses

By Chuck N. Baker
Being on active duty and deployed overseas brings its own set of challenges, not only for the serviceperson, but in some cases more directly for the spouse. When it comes to problems with mortgages and real estate, the U. S. Department of Housing and Urban Development (HUD) has remedies designed to help those who are deployed and their spouses who have been left behind.

Regular members of all branches of the U.S. Armed Forces, including Reserve and National Guard members who have been activated (and select civilians under specific conditions), have protections under the Servicemembers Civil Relief Act (SCRA). Most of the covered problems arise when a spouse who is left behind, is unable to pay their mortgage and faces foreclosure on their home.

There are many details and twists regarding the SCRA and this article can only provide a brief overview of some of the more salient points. The main entitlement SCRA provides is that it covers legal actions by mortgage lenders to enforce payment of loans. When a suit is filed during or within one year after a servicemember’s military service, courts are empowered to halt such proceedings for a period of time. The court can also choose to adjust the debt. In general, if property was purchased prior to the borrower entering the military, the interest rate on the loan during deployment cannot be more than six percent. Again, because of space limitations, there are other details pertaining to this section concerning lenders and borrowers that can have an impact on a loan, but that are not noted here.

If a service member believes he or she is entitled to a loan adjustment of six percent, communication works both ways. The borrower can (and perhaps should), write to the lender, reference the SCRA, and request the rate. Lenders can also initiate rate reductions by first directly inquiring about the military status of their clients. Lenders can also search the Defense Manpower Data Center operated by the Department of Defense. If they find client’s names listed there, they can contact clients on their own volition.

Servicemembers can always choose to hire lawyers when dealing with lenders, and bear the expense. However the government provides no-cost legal assistance for those who fall under the SCRA. Active duty individuals can contact their unit Judge Advocate or an installation Legal Assistance Officer. Such an officer for all armed forces branches can be contacted by calling (800) 342-9647.

Buying a home can be a daunting experience. Statistics say that this year 628,000 new homes will be sold, in addition to thousands of resales. Many of those will involve veterans as buyers and sellers. Losing a home or being forced to overpay is never fair, but it’s twice as bad when the borrower is serving his or her country. Consulting an attorney should always be a consideration, along with Housing and Urban Development providing no-cost help through the SCRA.