Independent consultants conducting foreclosure reviews at the residential servicing units of 12 national banks are specifically required to look for possible foreclosure violations involving active duty soldiers.
The Comptroller of the Currency required the independent consultants retained by the banks to look for possible violations of the Servicemembers Civil Relief Act.
Under SCRA, lenders must suspend foreclosure and eviction proceedings once a soldier is called up for active duty.
Reviewing engagement letters the independent consultants filed with the OCC, The Financial Times on Tuesday reported that 10 of the banks may have unlawfully foreclosed on 5,000 active duty military men and women.
Rep. Brad Miller, D-N.C., said these large servicing shops know what SCRA requires and they decided to ignore it. “It is hard to see this as anything except a flagrant disregard of a law that has been on the books continuously since the First World War," Rep. Miller said.
Back in May, Bank of America settled allegations of SCRA violations with the Department of Justice. The megabank agreed to pay 157 military men and women a minimum of $116,785 each plus compensation for lost equity due to wrongful foreclosures.
Bank of America, the nation's largest servicer, also is subject to the OCC's foreclosure review. B of A has retained Promontory Financial Group, LLC, as its independent consultant in the matter.
