Foreclosure And Mortgage Relief For Military Personnel

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Reservists, Guardsmen and Other Military Personnel should be aware that there is mortgage payment relief and protection from foreclosure provided by the Service members Civil Relief Act (formerly known as The Soldiers' and Sailors' Civil Relief Act of 1940).

The provisions of the Act apply to active duty military personnel who had a mortgage obligation prior to enlistment or prior to being ordered to active duty. This includes members of the Army, Navy, Marine Corps, Air Force, Coast Guard; commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration who are engaged in active service; reservists ordered to report for military service; persons ordered to report for induction under the Military Selective Service Act; and guardsmen called to active service for more than 30 consecutive days. In limited situations, dependents of service members are also entitled to protections.


The Act limits the interest that may be charged on mortgages incurred by a service member (including debts incurred jointly with a spouse) before he or she entered into active military service. Mortgage lenders must, at your request, reduce the interest rate to no more than six percent per year during the period of active military service and recalculate your payments to reflect the lower rate. This provision applies to both conventional and government-insured mortgages.

To request this temporary interest rate reduction, you must submit a written request to your mortgage lender and include a copy of your military orders. The request may be submitted as soon as the orders are issued but must be provided to a mortgage lender no later than 180 days after the date of your release from active duty military service.

Mortgage lenders may not foreclose, or seize property for a failure to pay a mortgage debt, while a service member is on active duty or within 90 days after the period of military service unless they have the approval of a court. In a court proceeding, the lender would be required to show that the service member's ability to repay the debt was not affected by his or her military service.

If you cannot afford to pay the mortgage even at the lower rate, your mortgage lender may allow you to stop paying the principal amount due on your loan during the period of active duty service. Lenders are not required to do this but they generally try to work with service members to keep them in their homes. You will still owe this amount but will not have to repay it until after your complete your active duty service. Additionally, most lenders have other programs to assist borrowers who cannot make their mortgage payments. If you or your spouse find yourself in this position at any time before or after active duty service, contact your lender immediately and ask about loss mitigation options. Borrowers with FHA insured loans who are having difficulty making mortgage payments may also be eligible for special forbearance and other loss mitigation options.

Mortgage lenders may not foreclose, or seize property for a failure to pay a mortgage debt, while a service member is on active duty or within 90 days after the period of military service unless they have the approval of a court. In a court proceeding, the lender would be required to show that the service member's ability to repay the debt was not affected by his or her military service.

Interest rate reductions are only for the period of active military service. Other benefits, such as postponement of monthly principal payments on the loan and restrictions on foreclosure may begin immediately upon assignment to active military service and end on the third month following the term of active duty assignment.

When you or your representative contact your mortgage lender, you should provide them with the notice that you have been called to active duty, a copy of the orders from the military notifying you of your activation, your FHA case number and evidence that the debt precedes your activation date.

Service members who have questions about the SCRA or the protections that they may be entitled to may contact their unit judge advocate or installation legal assistance officer. Dependents of service members can also contact or visit local military legal assistance offices where they reside.