Who can get help from the Servicemembers Civil Relief Act?
The Act applies to military members who are on active duty and who had a mortgage obligation before they joined the military or were sent to active duty. Among these are:
- Soldiers, sailors, marines, airmen, and coast guardsmen
- Commissioned officers in active service from the Public Health Service and the National Oceanic and Atmospheric Administration
- Reserve soldiers were told to report for duty
- Under the Military Selective Service Act, people who have been told to report for induction (training) must do so.
Guardsmen who are called to active duty for more than 30 days in a row.
Dependents of service members can also get protections in certain situations.
Do I have the right to help paying my debts?
The Act puts limits on how much interest a servicemember can be charged on mortgages he or she took out before going into active military service. This includes debts taken out with a spouse. At your request, lenders must lower the interest rate to no more than 6 percent per year while you are in the military and recalculate your payments to reflect the lower rate. This rule applies to both conventional mortgages and mortgages that are insured by the government.
Does the interest rate cap happen on its own?
No. You have to send a written request to your mortgage lender along with a copy of your military orders in order to get this temporary reduction in your interest rate. The request can be made as soon as the orders come out, but no later than 180 days after the date you were taken off active duty.
Am I eligible even if I can afford a higher interest rate on my mortgage?
If a mortgage lender thinks that your service in the military hasn't changed your ability to pay your mortgage, they can ask a court to stop the interest rate cut. Not very often does this happen.
What if, even with the lower rate, I still can't pay my mortgage?
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During active duty, you may be able to stop paying the loan's principal to your mortgage lender. Lenders are not required to do this, but they usually try to work with servicemembers to keep them in their homes. You will still have to pay this amount back, but you won't have to until after you finish your active duty service.
Most lenders also have other ways to help people who can't pay their mortgages. If you or your spouse are in this situation before or after active duty, contact your lender right away and ask about options for reducing the loss. If you have an FHA-insured loan and are having trouble making your mortgage payments, you may be able to get a special forbearance or use one of the other options for reducing your loss.
Am I safe from going bankrupt?
Without a court order, your mortgage lender can't take your home away while you are on active duty or in the first 90 days after you leave the military. A lender would have to show in court that your time in the military didn't change your ability to pay back the debt.
What information should I give my lender?
When you or someone on your behalf calls your mortgage lender, you should tell them the following:
- You have been called up for active duty.
- A copy of the military orders that tell you that you are being activated
- The number of your FHA case
- Proof that the debt was due before your start date.
HUD reminded FHA lenders that they are required by law to follow the SCRA. When an FHA lender hears that a borrower is on active military duty, they must tell the borrower or their representative the new payment amount, send new coupons or bills, and make sure that the new payments don't count as "insufficient."
Will my bills change in the future? Will I have to pay back the "subsidy" on the interest rate at some point?
Changes in interest rates are not subsidies. Interest that would have been charged but is more than 6% per year is not charged. But the interest rate and monthly payment are only lower while the service member is on active duty. Once the active military service period is over, the interest rate will go back to what it was before, and payments will be recalculated to match.
How long does the good thing happen? Does my tour of duty start and end the time?
Only people who are in the military on active duty can get lower interest rates. Other benefits, like delaying the monthly principal payments on the loan and preventing it from being foreclosed, may start as soon as the service member is sent to active duty and end three months after the end of the term of active duty.
How can I find out more about the help that military people on active duty can get?
If a service member has questions about the SCRA or the protections they may be eligible for, they can talk to their unit judge advocate or the legal assistance officer at their base. Dependents of service members can also call or go to the local military legal assistance office where they live. At www.legalassistance.law.af.mil/content/locator.php, you can find out where the military legal assistance office is for each branch of the armed forces.
