The Justice Department’s Civil Rights Division is investigating JPMorgan Chase, Saxon Mortgage Services and other lenders for alleged violations of the Servicemembers’ Civil Relief Act.
The investigations involve allegations of overcharging on mortgage fees and foreclosing on service members’ homes without court orders, according to Justice Department spokeswoman Xochitl Hinojosa.
Justice officials have authorized lawsuits against some lenders for violations, but Hinojosa declined to provide further information.
Under the SCRA, homes with mortgage contracts that pre-date a service member’s entry onto active duty cannot be foreclosed on during that active duty or within nine months after release from active duty without a court order.
The Justice investigation of Saxon Mortgage Services surfaced during federal district court proceedings in the Western District of Michigan the week of March 7, in which a settlement was reached involving the alleged improper foreclosure of the home of Army National Guard Sgt. James Hurley in 2004. Hurley sued Deutsche Bank and Saxon Mortgage, which was acquired by Morgan Stanley in 2006.
According to information brought out in court, “there are 23 families out there who may be entitled to significant compensation because of improper foreclosures by Saxon Mortgage,” said Louisiana attorney and retired Air Force Col. John Odom, who represented Hurley along with Michigan attorney Matthew Cooper.
“The word needs to get to these people,” Odom said. “If you had a pre-service mortgage obligation and while you were on active duty a nonjudicial foreclosure took place, you may have legal recourse. You need to contact your legal assistance office.”
More than two years ago, a Justice Department official told Military Times that officials were aware of the Hurley case and were reviewing it, describing it as “pretty significant SCRA case.” The Civil Rights division has been investigating violations of the SCRA since that duty was transferred to it in 2006.