Troops Could Cash In on Fed’s Foreclosure Settlement

Our friends at SpouseBuzz are reporting that Obama’s recently announced settlement with the major mortgage banks includes several specific provisions for servicemembers and veterans.

The plan will require the federal government to review thousands of servicemember held mortgages for illegal foreclosures and charges. As a result, eligible veterans and servicemembers could see a sizeable payback from the mortgage companies.

Under the settlement certain mortgage companies must pay back at least $116,785 plus any home equity to military homeowners who lost their homes due to illegal foreclosure procedures. In addition, servicemembers who were charged more than 6 percent interest rate (the highest rate allowed under the Servicemembers Civil Relief Act) will be eligible to receive four times what they overpaid in interest.

Answer these simple questions to determine if you qualify for a refund:

  1. Was your mortgage through Wells Fargo, Citigroup or Ally Financial (the companies included in the settlement)?
  2. Was your home foreclosed upon since 2006?
  3. Were you or are you currently being charged an interest rate on your mortgage above 6 percent (while on active duty)?

If your answer to any of these questions is “yes,” there is a possibility that you are eligible for the pay out. While the White House said servicemembers don’t have to apply to be able to receive the money or have their information reviewed, you can call and ask for help investigating whether or not you qualify. (Call 800-896-7743)

Read the full SpouseBuzz article to learn more.

About the Author

Terry Howell
Before becoming the Managing Editor for, Terry served 20 years in the U.S. Coast Guard as an Aviation Electrician’s Mate and aircrewman. In his final role in the Coast Guard, Terry served as a Career Development Advisor, where he provided career, finance, education, and benefits counseling to servicemembers and their families. Since retiring from the Coast Guard, Terry has authored the book, The Military Advantage, managed the content for TurboTap, the DoD's online transition program and VAforVets, the VA's transition assistance website. Terry earned both his Bachelor's and MBA at Corban University using Military Tuition Assistance and his GI Bill benefits to help cover the cost.
  • Charles

    This is excellent! This the most engaged Commander In Chief, ever!!! Wonder where are all the Obama Haters????

  • Capt Dot

    And so there should definitely be reviews since the government allowed so much of this to happen by now reining in Fannie and Freddie. Just remember that any money received will be taxable.

  • Cdr_Rogers

    I only pray that the troops still have their homes before the banks take them due to the delays in this as well as other Federal programs…

  • Eli

    I wonder if anyone who is still leaves in the property like I do, and have not paid mortgage for the last 4 yrs because of the interest being 8.75% and the second loan being 11.5% and with only one income. I have been trying to work with the bank in modifying these 2 loans but have not been successful wih that. I am currently under another loan modification with a third bank of LLC.

  • Mary

    I would love to say this is a wonderful program, but like so many other Obama programs, this is smoke and mirrors. According to the HAP office (Home owner assistance program) this is PROPOSED and must be approved by congress. since the $116,785 would be for homes where the owners never really paid that amount in monthly payments during their ownership, this is unlikely to get passed. If the administration would really like to help the active duty, request congress extend the date for HAP. More information on HAP see .

  • Renee

    If it is true could be a good thing for Service members… Unfortunately, I will have to see it before I believe it…

  • This would be great if this law has been passed, but I have fell subject to items like this before. I will believe this when someone contacts me with the fact I’m eligible and qualify for relief. I just don’t want to get my hopes up and have them shattered by some political ploy. Currently waiting for answer on modification 7.5% rate, which is yet to come through.

  • tom

    I tried the modification, that fell threw, I dont know what happened but it did not come threw. and between the high cost of gas and heating fuel and everything els going up in price and the fact I havenot had a raise in the last 5 years I have come to exept the fact that I have lost my house.

    • FLVet

      There are several programs available to modify a mortgage loan, but it all depends on who the investor is. For example, just because you call and pay Bank of America for your mortgage, they may not own the loan. In fact, it’s very likely that they don’t. Knowing who your investor is will help you determine what program they offer as not all are required to participate in MHA/HAMP.
      It is a delicate balance between not being able to afford your current mortgage and bills and being able to afford a lower, modified payment given your situation. The general rule is that the mortgage payment (PITI) is to be 31% of your gross income, yet that number has to be mathematically possible given your unpaid principal balance and the rate/term limits in place (2% & 40 yrs). If you’re in one of the state that the President designated as being Hardest Hit, you may qualify for assistance that way even if you can’t get a modification through your lender.

  • Duke N. McDuffie

    The fact that the current addministration is taking steps to correct actions against military members is refreshing. However, what we do makes us who we are, not what we say. Congress must put these words in motion in order to protect those that protect them.

    Do the right thing Congress.

  • Theresa

    I called that number and you do NOT get to talk to a person. You have to leave a message.

  • Duke N. McDuffie

    Great reading, but the timeline for the action is what needs to be nailed down. I fear that this will be just another point of conversation if the ball doesn’t get rolling soon.

  • mike

    How about the bank that got me while I was deployed HFC. They arent based in America like those other banks so they really dont care about screwing soldiers. Is anyone going to hold them accountable or is it just a few banks that will be responsible. I have a personal loan they had me take to pay the closing costs for the mortgage, it was for 15,000 since 2007 its finally down to 14,500 because although they brought the interest to 6% to compley with the soldiers and sailors act they charge close to 1.5% daily…… Whats up with this and the other banks that make up HSBC and Beneficial. Is anyone going to pry open their bad records.

  • jenajena

    WELLS FARGO!!! Bull S**T! They couldn’t wait to take my home from me. I also am disabled. The Loan Va officer said “Oh well, sorry” A vietnam agent orange Vet, died Jan. 18, 2012. By April 2012, and after many attempts to send Information to Va. Also going to see the WELLS FARGO broker that screwed us on a ‘streamline” I just can’t think it would work.

  • S. Heinlen

    After getting layed off from work in 2009, CitiMortgage keep telling me to call back in 6 weeks, when I asked to see if they would lower the house payment so I would not lose my home. I am a disabled Vet. Finally I had no choice but to file for bankruptcy, when my money ran out 1.5 years later. They then asked why I did it!!!