Most people aren’t aware of the fact that the mortgage lender will be unable to foreclose on your home, if one of the people holding the mortgage is on active service in the military. That’s right! No matter how far behind you are on your mortgage payments, no lender is legally permitted to foreclose or make a seizure on the property of an active military service person until a period of 90 days after they have returned to civilian life. This position is guaranteed by national mandates which have been instituted by Congress.
In addition to this foreclosure moratorium, those who obtain a mortgage prior to enlistment or the call to active duty may also qualify for a reduction in their interest rates that can help to lower their mortgage payments while they are away.
People who are in the military often find it hard to make their mortgage payments as long as they are still receiving the government salary for active duty personnel. That’s what the Service member’s Civil Relief Act (SCRA) was designed to help. It allows active duty personnel the opportunity to have their monthly payments reduced by as much as 6%. Depending on the current interest rate level this may turn out to have a huge impact on their monthly payments. The sum of money which is saved from such a reduction does not need to be repaid.
In order to qualify for such a reduction, your lender should be notified as soon as you have gotten your orders.
You’ll need to have the following in order to apply:
A Copy of your military orders
Duty notice
FHA case number
Evidence that your mortgage debt was procured before your enlistment/active duty status
Your activation date
Also along with the interest rate reduction, certain military homes may also be eligible for a reduction in their monthly payments and/ or a complete stay in payments for a certain period of time. Such conditions are not governed by law but are usually considered in cases where military personal face severe financial hardship while serving their country overseas.
The most essential thing is that you should inform your lender as soon as it becomes clear that you will not be able to make the regular monthly payments and inform them of the necessary reasons why. It may take some bargaining but in the end most will agree to reduce the payment terms when the military person in your family is on active duty. It makes sense; the law doesn’t allow the lender to foreclose until the military person returns home, so why can some form of payment be negotiated?
Either way, there is no need for anyone on active military service to bother about losing their home when they are away. The law is the law; it is illegal to repossess the home of active duty military personnel until a period of 30-60 days after they have resumed normal civilian life, regardless of how far back they are on their payments. It doesn’t give a lot of time to make the necessary arrangements on your return home but it is a safety net for those you leave behind.