The Consumer Financial Protection Bureau and Department of Justice yesterday put landlords and mortgage servicers on notice about how to handle protections for servicemembers and their families with regard to the COVID-19 pandemic by following the CARES Act and the Servicemembers Civil Relief Act.
Separate letters were sent to mortgage services and to landlords and property management companies, reminding them of their obligations when it comes to working with servicemembers. Landlords, for example, were reminded about protections for military tenants, some of whom have had to relocate as a result of the pandemic. That brings the SCRA into play, which allows servicemembers to terminate leases early and requiring landlords to obtain a court order prior to evicting or foreclosing on a servicemember. Mortgage servicers were reminded of their obligations under the CARES Act because the CFPB has received complaints from military families and veterans “on a range of potential mortgage servicing violations” including inaccurate credit reporting, misleading communications, and requiring lump sum payments for reinstating mortgage loans, according to the CFPB.
“The illegal foreclosures of military families in the last crisis was one of the financial industry’s worst failures,” said CFPB Director Rohit Chopra, in a statement. “The CFPB will be closely watching mortgage servicers and will hold them accountable for illegal tactics perpetrated against military families.”
A copy of the letter sent to landlords and property managers can be accessed by clicking here. A copy of the letter sent to servicers can be accessed by clicking here.
“The Department of Justice takes seriously its responsibility to safeguard the rights of servicemembers and veterans,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, in a statement. “While servicemembers carry the great burdens of this nation, they should not have to worry that their sacrifices will result in economic harm to their families. Mortgage servicers and landlords must ensure that they are in full compliance with federal laws intended to protect servicemembers and their families during military service.”
