US military loans are no longer sacred, and servicemen and women are suffering unfair foreclosures. According to the New York Times, hundreds of military homeowners that were current on their payments had their homes repossessed anyway during the housing crisis of 2008-2012. The offending institutions were those of immense bureaucracy that long ago outgrew their personal touch: banks like Bank of America, CitiGroup, and JP Morgan Chase.
While the Veterans Administration works hard to ensure that our fighting men and women are treated with the dignity befitting those willing to risk it all for the rest of us, the private sector apparently needs a bit of encouragement to follow suit. Many of these undue foreclosures occurred while the victims were on active duty in war zones in violation of the Servicemembers’ Civil Relief Act, a law that requires a court order to foreclose and/or repossess the property of a deployed servicemember. This law has been honored in one form or another since as far back as the Civil War.
In all fairness to the banks, they have begun to make amends. One of them, JP Morgan Chase, has even forgiven principals and held home giveaway programs specifically for veterans. They are also quick to point out that they currently have over 5,000 veterans on their payroll.
Whatever the confusion that led to the unlawful and unjust repossessions, V.A. loans are still considered to be solid. There’s a good reason for this. Despite what you hear in the media, the government isn’t running out of money anytime soon. With a guaranteed paycheck and a binding employment contract, military personnel are prime customers in most loan scenarios. Even with the credit crunch that resulted from the housing crisis, military loans have remained low interest and readily available.
Generally, the smaller the lender, the less the likelihood of the loan running into undue trouble. Personal attention can often lead to a quick fix, and if you’re current on a small loan through a small lender, discrepancies can be fixed without so many hoops to jump through. Although a bigger lender has more to lend you, smaller institutions such as local banks and credit unions are sometimes a better bet if you want the security of actually knowing your loan officer. As you can see, sometimes the inability to make a quick phone call can cost you house and home!
