Mortgage relief aimed at U.S. military

WASHINGTON — President Barack Obama unveiled mortgage relief efforts Tuesday, including several aimed at helping service members trapped in the housing downturn or victimized by lenders.

The protections were included in the $26 billion mortgage settlement announced last month by the government and five of the nation’s biggest banks.

The Obama administration provided further details Tuesday at the same time the president mentioned them at the outset of a wide-ranging news conference.

“It is unconscionable that members of our armed forces and their families have been some of those who have been most susceptible to losing their homes due to the actions of unscrupulous banks and mortgage lenders,” Obama said. “Over the last few years that happened — a lot.

“The settlement will make sure that you aren’t forced into foreclosure just because you have a permanent change in station but can’t sell your home because you owe more than it’s worth.”

Besides plans to help service members, Obama announced that the administration would reduce certain fees for borrowers seeking to refinance loans through the Federal Housing Administration, a potential savings of up to $1,000.

On the outreach to service members, administration officials said lenders under the eye of the Justice Department will review thousands of foreclosures on military personnel since 2006 to ensure they were carried out legally. If not, the victims would be compensated for lost equity, interest and at least $116,785, or the return of their homes, debt-free.

Also, the settlement expands an aid program for service members who were forced to sell their homes at a loss when they were transferred to a new duty station. Compensation will be extended to those who bought their homes between July 1, 2006, and Dec. 31, 2008, or who received a permanent change in station notice after Oct. 1, 2010.

Housing Secretary Shaun Donovan said military personnel will be eligible for loan modifications even if they are not living in the house.

The new programs react to a mortgage crisis that has not spared the military, particularly in still-reeling markets such as Southern Nevada. A survey last spring found more than 1,000 airmen at Nellis Air Force Base upside-down on mortgages, unable to refinance or forced to take losses on their homes.

“Service members and their families face significant challenges as they serve our country, but worrying about resolving housing issues should not be one of them,” said Rep. Joe Heck, R-Nev., a member of the House Armed Services Committee who has worked on mortgage issues affecting the military.

Aldo Martinez, a Realtor who has worked with active-duty soldiers and airmen in Southern Nevada, said the relief package sounded generous, but he predicted it will generate many questions from military personnel.

Service members who think their foreclosures may have been mishandled by the banks that signed the mortgage settlement — Bank of America, J.P. Morgan Chase, Ally Financial, Citi Group and Wells Fargo — can contact the Justice Department at 1-800-896-7743.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC.