For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.
By G. Steven Bray
I applaud the government for doing something right for a change. It partnered with a few of the big banks and mortgage servicers to help our servicemembers who have been called to active duty. Back in 2003, Pres. Bush signed the Servicemembers Civil Relief Act. The law provides a number of legal protections for active-duty servicemembers, including protection against eviction for non-payment of rent and the right to terminate a housing lease. It also prohibits creditors from charging more than 6% interest for any debt. This includes mortgage and credit card debt. And importantly, the creditor must reduce the servicemember’s monthly payment to reflect the lower interest rate and must forgive any amount of interest in excess of the 6% rate.
One deficiency in the law is that it requires servicemembers to ask that it be applied and prove they are eligible. The partnership alleviates that burden. The Dept. of Defense agreed to share its active duty database with these partner banks and servicers so they can notify servicemembers of their eligibility. Let’s hope they expand the initiative to other partners.