I just spoke to a good friend and veteran in Columbus Ohio that has a mortgage with JP Morgan Chase for 30 years at just over 6%. Chase lowered their interest rate to 1% for 3 years, which made their monthly payment drop by about $400. They were told that this was a special program for people who had been in the military, and had applied for a loan modification in the past. The letter they received was a godsend, allowing them a little extra in their budget to save and re-pay other debt. The letter said the payment reduction amount is taxable, which indicates to that this amounts to forgiven interest, but they should consult their tax preparer to be sure.
The benefit this couple received is probably part of the settlement reached with the Federal government and 49 state Attorneys General, Bank of America, J.P. Morgan Chase, Ally, Citi, or Wells Fargo in February to provide relief to servicemembers and veterans. From the Whitehouse’s website, the lenders will
- conduct a review of every servicemember foreclosed upon since 2006 and provide any who were wrongly foreclosed upon with compensation equal to a minimum of lost equity, plus interest and $116,785;
- refund to servicemembers money lost because they were wrongfully denied the opportunity to reduce their mortgage payments through lower interest rates;
- provide relief for servicemembers who are forced to sell their homes for less than the amount they owe on their mortgage due to a Permanent Change in Station;
- pay $10 million dollars into the Veterans Affairs fund that guarantees loans on favorable terms for veterans; and
- extend certain foreclosure protections afforded under the Servicemember Civil Relief Act to servicemembers serving in harm’s way.
Reducing Fees for FHA Borrowers Seeking to Refinance: FHA will cut its fees for refinancing loans already insured by the FHA. An estimated 2-3 million borrowers could be eligible for this savings, providing the typical FHA borrower with the opportunity to save about a thousand dollars a year through refinancing than they could have under today’s fee structure.
This is very brief information, servicemembers and their dependents who have or have had a mortgage with Bank of America, J.P. Morgan Chase, Ally, Citi, or Wells Fargo and want to read about all of the benefits (this is just a summary of some of them), should look into this further:
- Call the Justice Department at 800-896-7743, they have information to determine if you are victims and the settlement requires those individuals to be contacted
- Military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator
- Justice Department’s enforcement of the SCRA and the other laws protecting servicemembers is available at www.servicemembers.gov
- Whitehouse fact sheet