• Servicemembers who took out a mortgage
before active-duty service can’t be
foreclosed on without a court order, unless
the servicemember has waived his/her
rights. This protection applies while on
active-duty and for an additional one year
after leaving active-duty. This protection also
applies in states that do not require a court
order to foreclose and whether the lender or
servicer was informed about servicemember
status.
• In some circumstances, the SCRA
prohibits creditors from repossessing
servicemembers’ personal property,
including vehicles, without a court order.
That means that even if the servicemember
violates a contract by, for example, failing to
make monthly payments, the creditor must
first file a lawsuit and get an order from a
judge before the vehicle or personal property
can be repossessed.
• Servicemembers have the right to terminate
residential leases of property that is
occupied or intended to be occupied by the
servicemember and his or her dependents.
In addition to this right for residential leases,
under certain circumstances, the SCRA also
allows servicemembers to cancel or terminate
an auto lease without paying early termination
charges or penalties.
• Servicemembers and their dependents
cannot be evicted from their primary
residence without a court order. Even with a
court order, the eviction could be delayed for
90 days.
MILITARY LENDING ACT (MLA)
The MLA is different from the SCRA in that it
applies to certain loans after a servicemember is
on active duty. The MLA limits the interest rate
and fees to 36 percent. This is called the Military
Annual Percentage Rate or MAPR. Spouses and
dependents are also protected by the MLA.
The MLA applies to:
• Certain payday loans
• Vehicle title loans
• Tax refund anticipation loans
• Deposit and advance loans
• Unsecured, open-end lines of credit
• Credit cards
The MLA also covers additional products sold
with a loan and often wrapped into the loan
including:
• Credit insurance premiums and fees
• Debt cancellation contract fees
• Fees associated with extra products
There are some loans the MLA doesn’t cover –
namely, credit that is secured by the property
being purchased. These loans include:
• Residential mortgages (financing to buy or
build a home that is secured by the home),
mortgage refinances, home equity loans or
lines of credit, or reverse mortgages
• A loan to buy a motor vehicle when the credit
is secured by the motor vehicle you are
buying
• A loan to buy personal property when the
credit is secured by the property you’re
buying, like jewelry or a home appliance
The Department of Defense operates
databases that lenders can use to verify that
servicemembers are covered by the SCRA
or MLA (including members of the Reserve
or National Guard). The SCRA database can
be found at scra.dmdc.osd.mil and the MLA
database can be found at mla.dmdc.osd.mil.
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