Understanding the Impact of the Service Members Civil Relief Act (SCRA) on Foreclosures

Active-duty service members and their families receive legal and financial protections of a federal law called the Servicemembers Civil Relief Act, or SCRA. Any person who is serving in active duty, which includes the reserves and National Guard, can enjoy the many important benefits that the law provides.

While very beneficial, the SCRA can also be complicated to understand. That’s why it’s always advisable to reach out to a local legal assistance office if you meet the requirements of the program and are struggling to meet your financial obligations.

One protection that active-duty members receive under the SCRA is from foreclosures.

Below, we’ll discuss the SCRA in more depth, including how it pertains to qualifying individuals who are struggling to repay their mortgage obligations.

SCRA Protections for Servicemembers

The benefits that the SCRA provides to active-duty service members and their families are vast. It includes lower interest rates, protection against evictions and default judgments, postponement of matters in civil court, termination of their auto leases and phone service, coverage for life insurance, delays on foreclosures and much more.

The law applies to any individual who is “materially affected” by their service in the military. This includes any full-time active duty member of any of the five branches of the military, any reservist who’s on active duty and any National Guard member who’s on federal orders for 30 days or more, as well as their family members.

One of the provisions of the SCRA is that all credits have to reduce interest rates on all debts to 6% for any liability that was incurred before the borrower entered active duty. This reduced rate also extends for one year following active duty if the debt in question is a mortgage.

In addition, the law provides protection against default judgments, eviction and foreclosure. The SCRA states that no property seizure, foreclosure or sale that’s being done for non-payment can happen if it’s made either during the borrower’s active-duty service or within nine months after that service ended.

The only exception is in the case where one of the above is being done to follow a court order.

This protection is a major benefit for all borrowers who qualify, but especially for those in states that don’t require judicial foreclosure.

Any qualifying individual can also request a delay of 90 days for any civil court proceeding if their service prevents them from appearing in court. This delay is automatically granted, and another 90 days can be added on top of that if granted by a hearing officer, magistrate or judge.

How the SCRA Applies to Foreclosures

In relation to foreclosures specifically, the SCRA provides protections to all qualifying borrowers who took out a mortgage prior to entering active duty. This is generally referred to as a “pre-service mortgage obligation.”

Those who meet these requirements can’t have their home foreclosed on while they are on active duty. The protection will in most cases extend for nine months following the active duty ending as well.

These protections are granted to active-duty members regardless of whether they informed their mortgage servicer or lender about their military status.

What the SCRA does, in this case, is allow service members to manage their mortgage obligations so they can avoid foreclosure. Active-duty service members and their families may have trouble meeting their financial obligations simply because they are away from home. This law ensures that they have adequate time to serve, come home and manage their financial obligations properly.

If service members are still having trouble meeting their mortgage obligations once the protection period ends, they can request a further stay of their foreclosure proceedings.

Waivers of Rights under the Civil Relief Act

All of the rights that are provided under the SCRA are given to all those who qualify automatically. Active-duty service members can choose to waive these rights, though they have to do so through a written waiver that they need to sign either during their military service or after it’s over.

Any waiver that is signed before an individual actually enters military service will be deemed invalid under the federal law.

If you are considering signing a waiver of your rights under the Servicemembers Civil Relief Act, you should read over all the waiver documents very carefully. It’s also a good idea to seek the advice of a qualified attorney who can inform you of what rights you are giving up so that you can fully understand whether it’s in your best interest to do so. 

Accessing SCRA Benefits and Protections

If you are looking for more detailed information on the SCRA, you should visit the official Servicemembers Civil Relief Act website. The site provides full details on the federal benefits that the law provides as well as the protections that are offered and who they are offered to.

Active-duty service members and their families will find this website extremely valuable so they can better understand the rights they are extended through the federal law. 

In addition to a wealth of resources, the website provides the ability to submit single record requests that certify Title 10 active duty status and much more.

Know Your Rights Under the SCRA

The SCRA is a federal law that provides important protections for active-duty service members and their families. This includes protection against foreclosure during active duty and for a period of time after that duty has ended.

It’s important to understand your rights under SCRA so you can take advantage of them, and seek help from local legal resources if you find yourself in financial trouble.

Babi Legal Group has more than 20 years of experience in real estate law, and more than 10 years of experience in fields such as debt collection, debt settlement and bankruptcy. 

Contact us today to learn more and to get advice on your rights under the SCRA.