The U.S. Attorney General is investigating alleged violations of regulations that protect active-duty military personnel from high mortgage interest rates and foreclosures.
Specifically the Department of Justice is investigating lenders that overcharged and/or foreclosed on active servicemen and women without court orders, according to a recent Dow Jones newswire report.
The report does not name specific lenders under investigation, but says JPMorgan Chase & Co. admitted it had overcharged more than 4,000 family members and foreclosed on 14 in problems it turned up after an internal review. Chase has paid $2 million to the overcharged borrowers uncovered by the review and has reportedly resolved 13 of the foreclosures. But it still faces a lawsuit seeking punitive damages for U.S. Marine Capt. Jonathan Rowles, who claimed in a South Carolina court that he was overcharged for his mortgage.
"We deeply regret any difficulty this has caused the Rowles and anyone in the armed forces who experienced problems," a statement from the bank read. "There is no excuse for the problems they encountered with their loans."
The Servicemembers Civil Relief Act caps interest rates for loans to active-duty military members at a 6% annual rate and shields them from foreclosure, according to Dow Jones.
Following Chase's admission, other lenders said they are examining their own practices and procedures, though none have yet to publicly acknowledged uncovering any bad practices.
