Magazine article American Banker

Obama Announces Partnership with Banks, Servicers to Help Military Families

Magazine article American Banker

Obama Announces Partnership with Banks, Servicers to Help Military Families

Article excerpt

WASHINGTON -- President Obama announced an initiative Tuesday with several large banks and mortgage servicers designed to make it easier for members of the military and their families to lower their mortgage payments.

The initiative, which includes participation by Wells Fargo, Citigroup, Bank of America, Ocwen Loan Servicing and Quicken Loans, is meant to help service members obtain interest rate reductions on their mortgages. While military personnel are already entitled to such breaks under the Servicemembers Civil Relief Act of 2003, "many do not exercise these important rights," the White House said.

"Under the law, our service members are entitled to reduced mortgage rates," President Obama said in a speech to members of the American Legion at their annual convention in Charlotte, N.C. "But the burden is on them to ask for it and prove they are eligible. Today we are turning that around."

The SCRA requires lenders to suspend or postpone mortgage payments and foreclosure proceedings while service members are stationed away from home and are facing financial difficulties. It also caps interest payments on mortgages and other loans at 6%.

Under the partnership, the five lenders and services have agreed to simplify the process and proactively notify service members who are eligible for low rates under SCRA. They have also pledged to review their servicing portfolios against the Department of Defense database to identify borrowers who are also active-duty members of the military.

"It's clearly the right thing to proactively reach out to active-duty military member and make sure they -- and their families -- are financially protected," said Bill Emerson, chief executive officer of Quicken Loans, in a press release.

The initiative won praise from financial industry trade groups, some of whom touted their own programs to help veterans and active-duty servicemembers. …

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