Magazine article American Banker

Regulators Offer New Relief for Military Borrowers

Magazine article American Banker

Regulators Offer New Relief for Military Borrowers

Article excerpt

Byline: Donna Borak

WASHINGTON a Regulators issued new guidance Thursday designed to provide relief for military homeowners who must move quickly to comply with orders.

Under the guidelines, military personnel will be eligible to sell their homes in a short sale if their mortgage is owned by Fannie Mae or Freddie Mac, even if they are current on their mortgage. The guidance is meant to protect service personnel, many of whom have felt pressure to default on their mortgages a hurting their credit scores in the process - when they must comply with a Permanent Change of Station, or PCS, order.

The guidance also details what other protections servicemembers are entitled to and requires servicers to provide timely information to military families on their rights.

"If you risk your life in Iraq and Afghanistan or anywhere else to protect the rest of us, you shouldn't have to endure the stress of losing your home because a mortgage servicer gives you the run around and does not tell you about the help that is available to you," said Richard Cordray, director of the Consumer Financial Protection Bureau, at a news conference. "This should not be the case and not if the federal government can help it and we can."

About 185,000 military families receive orders each year that require them to move and relocate to another military installation. These moves are often quick and create hardships for military homeowners who happen to be underwater on their mortgages.

Holly Petraeus, assistant director for the CFPB's Office of Servicemember Affairs, who has traveled to thousands of military bases and spoken to families, said service members often find out too late about available programs or end up being "strung along, given inaccurate information and kept in the dark as to the status of their case."

There is no estimate on how many military families who own homes are underwater, but officials said it could help tens of thousands of military personnel. …

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