In the waning days of 2014, Congress extended special provisions in the Servicemembers Civil Relief Act (SCRA) that require postponing a foreclosure on a military servicemembers’ property if that member is currently engaged in military service or within one year after service has ended.
Under the SCRA, a lender may not foreclose on a servicemembers’ property while the borrower is actively serving in the military or within one year after that service has ended, except by court order or written agreement. This applies only for obligations incurred prior to a debtor entering military service.
A servicemember may request a stay of the action in a judicial foreclosure action “for a period of time as justice and equity require” if the action was initiated while the member was on active duty or within a year after his or her service has ended and the ability to make mortgage payments has been “materially affected by military service.”
California has enacted provisions similar to the SCRA, which applies to all military servicemembers and their dependents. When applicable, the SCRA provision prevents foreclosure by trustee sale unless a court intervenes. Prior to conducting a foreclosure sale, a trustee will generally require assurance that the trustor is not a servicemember. This assurance is usually provided by the beneficiary via affidavit on a form provided by the trustee. If the beneficiary is unaware of the trustor’s military status, it is usually necessary to obtain a certificate from the personnel departments of each of the armed forces attesting that the trustor is not in military service.
The latest action by Congress extended the sunset date on the 2012 amendment — which dictated a one-year time period under which foreclosure could not occur — to December 31, 2015. In addition, beginning January 1, 2016, the foreclosure waiting period will change from one year to nine months.
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