The Department of Justice says it has “several ongoing investigations” into lenders who overcharged or foreclosed on the homes of military service members.
The investigation follows the recent admission by J.P. Morgan Chase & Co., who in a civil lawsuit in South Carolina said that it had overcharged more than 4,000 family members and foreclosed on 14 nationwide. The bank has since set up a dedicated team to handle military loans and is reimbursing about $2 million to overcharged service members, and also has resolved the foreclosures.
The DOJ is asking other lenders to examine their own practices and make sure they are following the law when it comes to handling mortgages of military members.
The Servicemembers Civil Relief Act caps loan interest rates at 6 percent for active-duty military members, as well as protects them from foreclosure. Anyone who knowingly breaks the law faces prison and fines.
Source: “DOJ Investigating Violations of Military Lending Protections,” Dow Jones Newswires (Jan. 28, 2011)