Along with our Regulatory Agencies, the Federal Reserve Board recently released guidance that enhances the Servicemembers Civil Relief Act (SCRA). It concerns mortgage servicing practices that may pose risks to homeowners serving in the military. One of the main risks addressed is military homeowners who inform their loan servicers they have received Permanent Change of Station (PCS) orders and who might seek assistance with their mortgage loans. Employees must be aware of the options available for military homeowners with PCS orders!

For military homeowners, receiving PCS orders to relocate to a new duty station can present challenges such as being unable to sell their homes to pay off the mortgage debt. Mortgage loan servicer employees should be adequately trained about the options available for assisting military homeowners with PCS orders so they can provide accurate, clear, and readily understandable information about available options. Servicers should also communicate decisions on assistance requests in a timely manner.

In addition to the Federal Reserve Board’s guidance, the Government Accountability Office (GAO) recently concluded that regulators should conduct more loan file testing for SCRA compliance, particularly in regards to mortgage foreclosure protection. This push for compliance comes as a result of a GAO report that shows at least 15,000 instances where financial institutions failed to properly reduce service members’ mortgage rates and more than 300 improper foreclosures in recent years. A contributing factor could be that only 48 percent of banks and credit unions were reviewed for SCRA compliance in recent years, hence the new emphasis on regulators to ensure compliance.

The best way to handle this new guidance and emphasis on compliance is to educate yourself and your employees. Consider TRC Interactive’s online training course “Servicemembers Civil Relief Act.” To learn more about courses available at TRC Interactive, email us at info@trcinteractive.com or contact your TRC Interactive Sales Consultant at (800) 222-9909. We look forward to serving your needs.