President Obama will announce a new voluntary partnership with financial lenders across the country that will help deliver important financial and home loan-related protections to our military community. Congress passed the Service members Civil Relief Act (SCRA) in 2003 to provide protections for military members as they enter active duty. Our Service women and men have earned important financial protections under the law, but too many do not exercise these important rights. But when business and government work together we can make a difference.
Banks and Mortgage Servicers Answer the President’s Call to Action: Wells Fargo Bank, N.A., CitiMortgage, Inc., Bank of America, N.A., Ocwen Loan Servicing, LLC, and Quicken Loans are partnering with the Administration to make it easier than ever for active duty service members to obtain mortgage interest rate reductions and reduce their monthly payments. The partnership cuts red tape where possible and establishes concrete steps to reduce the burden on service members by having participating mortgage servicers proactively identify, notify and assist in enrolling eligible service members.
Key Provisions of the Partnership
- Proactive Identification of Active Duty Service Members: Under the partnership, participating servicers will proactively identify active duty personnel no less than once a quarter by querying the Defense Manpower Data Center (DMDC), a searchable database of individuals who were or on Title 10 active duty status, against their loan portfolio, reducing the burden on the service member.
- Proactive Outreach to Eligible Service Members: Participating mortgage servicers will proactively reach out to individuals that have been identified as being eligible for benefits under SCRA to notify them of their benefits. Servicers will leverage multiple marketing and communication tactics including telephone, mail, e-mail, or other reasonable forms of communication.
- Simplify the Application Process: Participating mortgage servicers will work together to ease the burden of enrollment and satisfaction of the SCRA written notice requirement.
Ensure Active-Duty Military Get the Student Debt Relief They Are Entitled to: In addition to the Administration’s efforts to work with banks and mortgage servicers to ensure service members have access to the benefits they are eligible under the SCRA, the Department of Education has directed its federal student loan servicers to match their student borrower portfolios against DoD’s database to identify active-duty service members who are eligible to cap interest rates on student loans – including federal student loans — at 6 percent and to reduce those interest rates automatically for those eligible without the need for additional paperwork. This week, the Department released additional guidance to encourage Federal Education Loan program servicers to provide for a similar streamlined process.