There are millions of sad stories in the collapse of the nation’s housing market and the often-heartbreaking foreclosures that continue. But few are as disturbing as those involving America’s fighting men and women who have been dispossessed at home. It is not enough to face death and destruction, particularly those who are part-time soldiers called to active duty from the reserves and National Guard units. Now adding to their worries is the threat of coming home to nothing despite a federal law that is designed to prevent that.
But guess what? The legendary gnomes of the banking industry, it seems, do not pay much attention to the law, at least when it comes to the Civil Relief Act that states unequivocally that service members on active duty are spared many of the legal consequences of their forced absences. Their homes are protected from foreclosure. Yet it has taken some banks a long time to get it right — the entire decade of two wars and tens of thousands of call-ups. Surprise!
In one blood-boiling example, cited by The New York Times, a combination of apparent violations by a major international bank and a subsidiary of an American institution not only cost a young National Guardsman his hard-won property, but maybe his marriage. He is still fighting in court six years later. His house and acreage were sold at auction by the sheriff, and his wife and two children were, so to speak, put out on the street.
It seems that Deutsche Bank and a mortgage subsidiary of Morgan Stanley not only violated the relief act, according to a federal judge’s rulings, they did so by obstinately making illegal demands of proof that the Michigan National Guardsman was in fact in Iraq, where, of course, he truly was. And despite the judge’s decision that included approval of his right to sue for punitive damages, they have continued, as the Times put it, to "soldier on" in court.
Hopefully, the court case that comes up in March finally will resolve this in favor of the soldier and his family. But to be honest with you, if I were running the institutions involved, I would have done so one heck of a lot earlier despite any fear of setting a lingering precedent, which seems to have been part of the reluctance to do so. That would be the best public relations result these institutions could achieve at this late date for being on the wrong side of this issue, legally and morally.
Otherwise, if I were the judge, I would not only award substantial punitive damages for the pain and suffering, I would impose a hefty fine and throw in the dispossessed soldier’s legal costs. Who in the world are these nitwits paying to advise them on image?
Obviously, some banks at least appear to have gotten the message as they scrambled to reach the right side of a law that was designed to give U.S. troops a little peace when confronted with just the opposite in behalf of us all. As publicity from these cases rose, it seems to have spared some military families the agony of foreclosure. On the other hand, problems continued as lending institutions either ignored the law or feigned ignorance. Well, all one has to do to understand why is look at the entire mess this industry put us all in and how hugely indefensible some policies have been. It now turns out that enormous numbers of foreclosures of civilian families were mishandled with a cavalier disdain for the legal niceties by processors.
A bright spot in all this came out of a South Carolina lawsuit by a Marine seeking relief for an interest rate as provided by the act. JPMorgan Chase, according to the Times, reviewed its policies recently and acknowledged it had overcharged thousands of military families on their mortgages and that it had improperly foreclosed on 14. It apologized and sent out $2 million in refunds and is working to overturn the foreclosures.
At least in one instance there is proof the term "hard hearted" and "banker" are not always synonymous.
Dan K. Thomasson is a former editor of the Scripps Howard News Service