SERVICEMEMBERS 

CIVIL RELIEF ACT

Information on 

Mortgage Protections 

and Related 

Education Efforts

Report to Congressional Committees

January 2014

GAO-14-221

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-221, a report to 

congressional committees

January 2014

SERVICEMEMBERS CIVIL RELIEF ACT

Information on Mortgage Protections and Related 

Education Efforts

Why GAO Did This Study

SCRA seeks to protect eligible active 

duty military personnel in the event that 

their military service prevents them 

from meeting financial obligations. 

Mortgage-related protections include 

prohibiting mortgage servicers from 

foreclosing on servicemembers’ homes 

without court orders and capping fees 

and interest rates at 6 percent. 

Traditionally, servicemembers received 

90 days of protection beyond their 

active duty service, but this period was 

extended to 9 months in 2008 and to 1 

year in 2012. The legislation that 

provided the 1-year protection period

also mandated that GAO report on 

these protections. 

This report examines (1) available 

information on changes in the financial 

well-being of servicemembers who 

received foreclosure-prevention and 

mortgage-related interest rate 

protections under SCRA, including the 

extent to which they became 

delinquent and the impact of protection 

periods; and (2) DOD’s partnerships 

with public- and private-sector entities 

to provide financial education and 

counseling about SCRA mortgage 

protections to servicemembers and 

views on the effectiveness of these 

partnerships. To address these 

objectives, GAO sought and received 

data from three large mortgage 

servicers and a large credit union

covering a large portion of all mortgage 

loans outstanding and potentially 

SCRA-eligible borrowers. GAO also 

reviewed documentation on DOD’s 

partnerships and relevant education 

efforts related to SCRA mortgage 

protections. GAO interviewed DOD 

officials and partners who provided 

SCRA mortgage education and 

counseling.

What GAO Found

The number of servicemembers with mortgages eligible for Servicemembers Civil 

Relief Act (SCRA) mortgage protections is unknown because servicers have not 

collected this information in a comprehensive manner. Based on the limited and 

nongeneralizeable information that GAO obtained from the three mortgage 

servicers and the credit union, a small percentage of the total loan portfolios were 

identified as eligible for SCRA protections. Two large servicers had loan-level data 

on delinquency rates. For those identified as SCRA-eligible, rates ranged from 16 

to 20 percent and from 4 to 8 percent for their other military borrowers. 

Delinquencies at the credit union were under 1 percent. Some servicemembers 

appeared to have benefitted from the SCRA interest rate cap of 6 percent, but 

many eligible borrowers had apparently not taken advantage of this protection. For 

example, at one institution 82 percent of those who could benefit from the interest 

rate caps still had mortgage rates above 6 percent. The data also were insufficient 

to assess the impact of SCRA protections after servicemembers left active duty, 

although one institution’s limited data indicated that military borrowers had a higher 

risk of delinquency in the first year after leaving active duty. But those with SCRA 

protections also were more likely to cure delinquencies during this period than the 

institution’s other military borrowers. Given the many limitations to the data, these 

results should only be considered illustrative. Most of these institutions indicated 

that they made recent changes to better identify SCRA-eligible borrowers and 

improve the accuracy of the data.

The Department of Defense (DOD) has partnerships with many federal agencies 

and nonprofit organizations to help provide financial education to servicemembers, 

but limited information on the effectiveness of these partnerships exists. DOD and 

its partners have focused on promoting general financial fitness rather than 

providing information about SCRA protections. But some partners provide SCRA 

outreach and support to servicemembers. For example, the Bureau of Consumer 

Financial Protection has an Office of Servicemember Affairs that provides SCRA 

outreach to servicemembers and mortgage servicers responsible for complying 

with the act. Although stakeholders GAO interviewed generally offered favorable 

views of these partnerships, some said obtaining additional information about 

educational resources and partnership performance could improve programs. 

However, DOD has not undertaken any formal evaluations of the effectiveness of 

these partnerships. This finding is consistent with GAO’s July 2012 review of 

SCRA education efforts, which found that DOD had not assessed the effectiveness 

of its educational methods and therefore could not ensure it reached 

servicemembers in the most effective manner. GAO recommended in July 2012 

that DOD assess the effectiveness of its efforts to educate servicemembers on 

SCRA to determine better ways for making servicemembers (including reservists) 

aware of SCRA rights and benefits. In response to that recommendation, as of 

December 2013, DOD was reviewing the results of its recent surveys on the overall 

financial well-being of military families and planned to use these results to adjust 

training and education for SCRA, as appropriate. GAO’s current finding that many 

servicemembers did not appear to be taking advantage of the SCRA interest rate 

cap appears to reaffirm that DOD’s SCRA education efforts could be improved and 

View GAO that an assessment of the effectiveness of these efforts is still warranted. -14-221. For more information, 

contact Lawrance Evans (202) 512-8678 or 

EvansL@gao.gov.
Page i GAO-14-221 Servicemembers Civil Relief Act 

Letter 1

Background 4

Limited Data Suggest SCRA Benefits Some Servicemembers but 

Impact of Protection Periods Unknown 7

DOD and Various Partners Provide Financial Education, but 

Limited Information on Effectiveness of Efforts Exists 16

Agency Comments 21

Appendix I Objectives, Scope, and Methodology 22

Appendix II GAO Contact and Staff Acknowledgments 26

Tables

Table 1: Total Loans and Known Military and SCRA-Eligible Loans 

at Selected Institutions, 2012 9

Table 2: Summary of Data Obtained from Selected Institutions 23

Figure

Figure 1: External Organizations Acting as DOD Financial 

Education Partners, as of December 2013 17

Abbreviations

DMDC Defense Manpower Data Center

DOD Department of Defense

MOU memorandum of understanding

SCRA Servicemembers Civil Relief Act

SOF Status of Forces

Contents

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Page 1 GAO-14-221 Servicemembers Civil Relief Act

441 G St. N.W.

Washington, DC 20548

January 28, 2014

The Honorable Bernard Sanders

Chairman

The Honorable Richard Burr

Ranking Member 

Committee on Veterans Affairs

United States Senate

The Honorable Jeff Miller

Chairman 

The Honorable Michael H. Michaud 

Ranking Member 

Committee on Veterans Affairs

House of Representatives

The Servicemembers Civil Relief Act (SCRA) provides protections to 

active duty military personnel in the event that their military service 

prevents them from meeting financial obligations.1 The act provides 

numerous mortgage-related protections to eligible servicemembers who 

are on active duty or have recently completed active duty service.2

 1

Pub. L. No. 108-189, 117 Stat. 2835 (codified as amended at 50 U.S.C. app. §§ 501 –

597b).

The 

protections include prohibiting mortgage servicers—entities responsible 

for administering home-mortgage loans—from foreclosing on 

2

Active duty is defined by 10 U.S.C. § 101(d)(1) as “full-time duty in the active military service 

of the United States,” including “full-time training duty, annual training duty, and attendance, 

while in the active military service, at a school designated as a service school by law or by the 

Secretary of the military department concerned.” SCRA defines servicemembers as members 

of the uniformed services found in 10 U.S.C. §101(a)(5) which includes all the military services, 

(Army, Navy, Air Force, Marine Corps, and Coast Guard), and the commissioned corps of the 

National Oceanic and Atmospheric Administration and the Public Health Service. 50 U.S.C. 

app. § 511(1). Reserve members who are ordered to report for military service are entitled to 

SCRA protections beginning on the date of the member’s receipt of the order and ending on 

the date on which the member reports for military service. 50 U.S.C. app. § 516(a). In the case 

of the National Guard, military service is defined by the SCRA as “service under a call to active 

service authorized by the President or the Secretary of Defense for a period of more than 30 

consecutive days . . . for purposes of responding to a national emergency declared by the 

President and supported by Federal funds.” 50 U.S.C. app. § 511(2)(A)(ii). For this review, we 

collected information related to SCRA protections for active-duty servicemembers and National 

Guard and Reserve members but did not include officials from the National Oceanic and 

Atmospheric Administration and the Public Health Service. 
Page 2 GAO-14-221 Servicemembers Civil Relief Act

servicemembers’ homes without court orders and capping fees and 

interest rates at 6 percent.

Several legislative changes in recent years have extended the period of 

time in which eligible servicemembers receive protection from foreclosure 

under SCRA. Currently, the protections last for up to a year after active 

duty service. Traditionally, servicemembers received 90 days of 

protection, but this period was extended to 9 months in 2008. In August 

2012, Congress extended the period to 1 year.3 The extended protection 

period remains in effect until December 31, 2014, after which the 

protection period will revert to 90 days.4 The legislation that provided the 

1-year protection period—the Honoring America’s Veterans and Caring 

for Camp Lejeune Families Act of 2012—also mandates that GAO report 

on the impact of the foreclosure-prevention protections and the varying 

protection periods and assess the partnerships established by the 

Secretary of Defense to provide servicemembers financial education and 

counseling.5

To assess changes in the financial well-being of servicemembers who 

received SCRA mortgage protections, we obtained and analyzed loanlevel data from three financial institutions (two large single-family 

mortgage servicers and a large credit union) and summary data (not loanlevel) from a fourth financial institution (a large single-family mortgage 

This report examines (1) available information on changes in 

the financial well-being of servicemembers who received foreclosureprevention and mortgage-related interest rate protections under SCRA, 

including the extent to which servicemembers became delinquent on their 

mortgages after leaving active duty and the impact of protection periods; 

and (2) the Department of Defense’s (DOD) collaborations—referred to 

as partnerships in this report—with public- and private-sector entities to 

provide financial education and counseling about SCRA mortgage 

protections to servicemembers and views on the effectiveness of these 

partnerships.

 3

Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, Pub. L. 

No. 112-154, § 710(b), 126 Stat. 1165, 1208 (amending 50 U.S.C. app. § 533(c)).

4

Id. at 710(d).

5

Id. at 710(e). Limitations in the availability and quality of financial institution data 

restricted our reporting objectives and our analysis of the various SCRA protection 

periods. Consequently, we developed reporting objectives consistent with these 

limitations, and we note specific data limitations in appendix I and throughout this report, 

as appropriate.
Page 3 GAO-14-221 Servicemembers Civil Relief Act

servicer).6 We conducted a quantitative analysis of the loan-level data, 

which included information on loan status, total fees, and the financial 

outcomes of borrowers (such as whether the borrowers cured mortgage 

defaults). Our analysis is not based on a representative sample of all 

servicemembers eligible for SCRA mortgage protections and is not 

generalizable. Also, the conclusions we could draw about the effects of 

SCRA were limited because the data did not always comprehensively 

identify SCRA-eligible and other military borrowers and reflected a limited 

time frame.7 To the extent individual loan-level data were available, we 

conducted quantitative analyses on the changes in financial well-being of 

the servicemembers at each institution. Where appropriate, we also relied 

on a summary (not loan-level) analysis that the fourth institution (a large 

single-family mortgage servicer) provided of its servicemember loan 

portfolio. Through interviews with financial institution officials and data 

testing, we determined the mortgage data were sufficiently reliable for the 

limited purpose of identifying relative changes in the financial well-being 

of servicemembers identified as having received SCRA mortgage 

protections for the servicers in our analysis. But, the relative delinquency 

and cure rates we derived should be interpreted with caution because of 

issues with identification of servicemembers and SCRA-eligible borrowers 

in the data (see app. I for more information). Based on interviews with 

financial institution officials, we determined our institution-specific 

analyses were sufficiently reliable for the same limited purpose. We also 

analyzed results from DOD’s Status of Forces (SOF) surveys, which 

include data on servicemember mortgages and financial well-being.8

 6

We measured financial well-being in terms of the likelihood of becoming delinquent on a 

mortgage, curing the mortgage delinquency, and obtaining a reduction in the mortgage 

interest rate. Our sample of financial institutions includes some servicers that banking 

regulators cited in 2011 for errors in foreclosure processing, including failures to properly 

provide SCRA benefits to eligible servicemembers.

Finally, we interviewed DOD officials (including those of individual military 

services, staff responsible for the surveys, and staff that oversee a 

database of active duty status of servicemembers), military associations, 

and selected financial institutions to obtain available information or 

reports on the impact of SCRA protections.

7

Financial institutions are not required to collect SCRA-specific information for the loans in 

their portfolios.

8

DOD periodically conducts these web-based surveys of active-duty servicemembers and 

members of the reserves to evaluate various programs and policies and their impact on 

servicemembers.
Page 4 GAO-14-221 Servicemembers Civil Relief Act

To examine views on the effectiveness of DOD’s partnerships, we 

reviewed documentation on partnerships with public and private entities 

that provide financial education and counseling to servicemembers, 

including efforts related to SCRA mortgage protections. We also 

interviewed DOD officials (including the individual services) and selected 

DOD partners to determine how such partnerships provide SCRA 

mortgage education and counseling and to gather views on and any 

assessments of the effectiveness of these partnerships.

We conducted this performance audit from June 2013 to January 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

Congress enacted SCRA in December 2003 as a modernized version of 

the Soldiers’ and Sailors’ Civil Relief Act of 1940. In addition to providing 

protections related to residential mortgages, the act covers other types of 

loans (such as credit card and automobile) and other financial contracts, 

products, and proceedings, such as rental agreements, eviction, 

installment contracts, civil judicial and administrative proceedings, motor 

vehicle leases, life insurance, health insurance, and income tax 

payments.9

SCRA provides the following mortgage-related protections to 

servicemembers:

• Interest rate cap. Servicemembers who obtain mortgages prior to 

serving on active duty status are eligible to have their interest rate and 

 9

A servicemember may waive many of the rights and protections offered by SCRA, 

provided that the waiver meets certain criteria, including that it is in writing and in a 

document separate from the obligation or liability to which it applies. 50 U.S.C. app. § 

517(a). The waiver provision “is designed to induce servicemembers and their creditors to 

adjust their respective rights privately and to make it clear that no restrictions have been 

placed upon the usual right of the parties to re-negotiate an obligation.” The Judge 

Advocate General’s Legal Center and School, U.S. Army, JA 260, Servicemembers Civil 

Relief Act, 2-8 (March 2006).

Background
Page 5 GAO-14-221 Servicemembers Civil Relief Act

any fees capped at 6 percent.10 The servicer is to forgive interest and 

fees above 6 percent per year. Servicemembers must provide written 

notice to their servicer of their active duty status to avail themselves of 

this provision.

• Foreclosure proceedings. A servicer cannot sell, foreclose, or seize 

the property of a servicemember for breach of a preservice obligation 

unless a court order is issued prior to the foreclosure or unless the

servicemember executes a valid waiver.11 If the servicer files an 

action in court to enforce the terms of the mortgage, the court may 

stay any proceedings or adjust the obligation.

• Fines and penalties. A court may reduce or waive a fine or penalty 

incurred by a servicemember who fails to perform a contractual 

obligation and incurs the penalty as a result if the servicemember was 

in military service at the time the fine or penalty was incurred and the 

servicemember’s ability to perform the obligation was materially 

affected by his or her military service. Federal authorities have applied 

this provision to prepayment penalties incurred by servicemembers 

who relocate due to permanent change-of-station orders and 

consequently sell their homes and pay off mortgages early.

• Adverse credit reporting. A servicer may not report adverse credit 

information to a credit reporting agency solely because 

 1050 U.S.C. app. § 527. The act defines interest to include service charges, renewal 

charges, fees, or any other charges (except bona fide insurance). 50 U.S.C. app. § 

527(d). A servicer has the right to challenge the interest-rate reduction in court, which may 

grant relief if the court determines that the servicemember’s ability to pay interest above 6 

percent is “not materially affected by reason of the servicemember’s military service.” 50 

U.S.C. app. § 527(c).

1150 U.S.C. app. § 533(c). This provision is directed at nonjudicial foreclosures. Once a 

mortgage servicer decides to foreclose, the servicer proceeds with it follows either a 

judicial or nonjudicial foreclosure method, depending on stathe law of the state in which 

the property is located. In a judicial foreclosure, servicers initiate a formal foreclosure 

action by filing a lawsuit in court. At the conclusion of a hearing, the presiding judge, in the 

appropriate circumstances, will issue an order for the foreclosure to proceed. A nonjudicial 

foreclosure process takes place outside the courtroom and is typically conducted by the 

trustee named in the deed-of-trust document. Trustees, and sometimes servicers, 

generally send a notice of default to the borrower and publish a notice of sale in area 

newspapers or legal publications. Pursuant to 50 U.S.C. § 533(c), if a lender in a 

nonjudicial foreclosure state forecloses on a servicemember that who took out his or her 

mortgage prior to active duty service without a court order during or within a year after the 

servicemember’s active duty status, the foreclosure is invalid.. 
Page 6 GAO-14-221 Servicemembers Civil Relief Act

servicemembers exercise their SCRA rights, including requests to 

have their mortgage interest rates and fees capped at 6 percent.12

Both servicemembers and servicers have responsibility for activating or 

applying SCRA protections. For example, to receive the interest-rate 

benefit, servicemembers must identify themselves as active duty military 

and provide a copy of their military orders to their financial institution. 

However, the responsibility of extending SCRA foreclosure protections to 

eligible servicemembers often falls to mortgage servicers. The burden is 

on the financial institution to ensure that borrowers are not active duty 

military before conducting foreclosure proceedings. Eligible

servicemembers are protected even if they do not tell their financial 

institution about their active duty status. One of the primary tools 

mortgage servicers use to comply with SCRA is a website operated by 

DOD’s Defense Manpower Data Center (DMDC) that allows mortgage 

servicers and others to query DMDC’s database to determine the active 

duty status of a servicemember.13

Under SCRA, the Secretaries of each military service and the Secretary 

of Homeland Security have the primary responsibility for ensuring that 

servicemembers receive information on their SCRA rights and 

protections.14

 1250 U.S.C. app. § 518(3). 

Typically, legal assistance attorneys on military installations 

provide servicemembers with information on SCRA during routine 

briefings, in handouts, and during one-on-one sessions. Additionally, 

DOD has established public and private partnerships to assist in the 

financial education of servicemembers.

13We previously reported that mortgage servicers had some challenges using DMDC to 

correctly identify the military status of some borrowers. For example, representatives from 

some mortgage servicers said that the website only allowed them to check the eligibility 

status of one borrower at a time, and they said that some servicemembers, such as those 

serving in the Special Forces, did not appear in the database. However, in 2012 DOD 

developed a way for financial institutions and others to conduct batch queries of the 

database for up to 250,000 servicemembers at a time. DOD officials said that active duty 

status has been updated for all servicemembers, including those on special operations. 

See GAO, Mortgage Foreclosures: Regulatory Oversight of Compliance with 

Servicemembers Civil Relief Act Has Been Limited, GAO-12-700 (Washington, D.C.: July 

17, 2012). 

14Pub. L. No. 108-109, § 105, 117 Stat. 2835, 2839 (codified at 50 U.S.C. app. § 515); 

see also, National Defense Authorization Act of Fiscal Year 2006, Pub. L. No. 109-163, § 

690, 119 Stat. 3136, 3337.
Page 7 GAO-14-221 Servicemembers Civil Relief Act

The limited data we obtained from four financial institutions showed that a 

small fraction of their borrowers qualified for SCRA protections. Our 

analysis suggests that SCRA-protected borrowers generally had higher 

rates of delinquency, although this pattern was not consistent across the 

institutions in our sample and cannot be generalized.15

Based on our interviews and the data sources we reviewed, the number 

of servicemembers with mortgages eligible for SCRA protections is not 

known because servicers have not systematically collected this 

information, although limited data are available. Federal banking 

regulators do not generally require financial institutions to report 

information on SCRA-eligible loans or on the number and size of loans 

that they service for servicemembers.

However, SCRA 

protections may benefit some servicemembers. SCRA-protected 

borrowers at two of the three institutions from which we had usable data 

were more likely to cure their mortgage delinquencies than other military 

borrowers. Some servicemembers also appeared to have benefitted from 

the SCRA interest rate cap. Financial institutions we contacted could not 

provide sufficient data to assess the impact of different protection periods, 

but our analysis indicates that mortgage delinquencies appeared to 

increase in the first year after active duty.

16

 15In addition to the loans not constituting a statistically representative sample, the various 

servicer datasets identify SCRA status imperfectly and provide data for different periods. 

Although the results in this section should be interpreted with caution, we believe we have 

taken steps to draw reasonable conclusions by conducting separate analyses, identifying 

outliers, and acknowledging caveats. See appendix I for more details. 

SCRA compliance requires that 

financial institutions check whether a borrower is an active duty 

servicemember and therefore eligible for protection under SCRA before 

initiating a foreclosure proceeding. However, institutions are not required 

to conduct these checks on loans in the rest of their portfolio, and two told 

us that they do not routinely check a borrower’s military status unless the 

borrower is delinquent on the mortgage. Consequently, the number of 

SCRA-eligible loans that these two institutions reported to us only 

includes delinquent borrowers and those who reported their SCRA 

16In 2011, several federal banking regulators directed 14 mortgage servicers to engage 

third-party consultants to conduct a file review of 2009 and 2010 foreclosure actions. 

Consultants were instructed to review 100 percent of the files identified as being 

associated with borrowers protected by SCRA, among other high-risk categories. As part 

of this process, consultants compiled a summary count of the number of borrowers who 

had their SCRA protections violated; however, that information was not comprehensive 

enough for us to use to determine the overall number of SCRA-eligible borrowers. 

Limited Data Suggest 

SCRA Benefits Some 

Servicemembers but 

Impact of Protection 

Periods Unknown

Actual Number of 

Servicemembers Eligible 

for SCRA Mortgage 

Protections Unknown
Page 8 GAO-14-221 Servicemembers Civil Relief Act

eligibility to the financial institution. Two other institutions were able to 

more comprehensively report the number of SCRA-eligible loans in their 

portfolio because they routinely check their portfolio against the DMDC 

database. Additionally, only one of the financial institutions we contacted 

was able to produce historical data on the total number of known SCRAeligible loans in its portfolio.

Although exact information on the total number of servicemembers 

eligible for the mortgage protections under SCRA is not known, DOD data 

provide some context for approximating the population of 

servicemembers who are homeowners with mortgage payments and who 

therefore might be eligible for SCRA protections.17 According to DOD 

data, in 2012 there were approximately 1.4 million active duty 

servicemembers and an additional 848,000 National Guard and Reserve 

members, of which approximately 104,000 were deployed. While DOD 

does not maintain data on the number of servicemembers who are 

homeowners, DOD’s 2012 SOF survey indicated that approximately 30 

percent of active duty military made mortgage payments.18 For reservists, 

DOD’s most recent survey of homeownership in June 2009 indicated that 

53 percent of reservists made mortgage payments.19

 17DOD relies on the private sector as the primary source of housing for personnel 

normally eligible to draw a housing allowance. In May 2011 we reported that while DOD 

may require certain servicemembers to live on base, such as key personnel and most 

junior-enlisted personnel without dependents, about two-thirds of active-duty service 

members and their families in the United States choose to live off base. GAO, Military 

Housing: Enhancements Need to Housing Allowance Process and Information Sharing 

Among Services,

According to DOD 

officials, industry trade group representatives, SCRA experts, and military 

service organizations, the servicemembers most likely to be eligible for 

SCRA mortgage protections are members of the Reserve components 

because they were more likely to have had mortgages before entering 

active duty service.

GAO-11-462, (Washington, D.C.: May 16, 2011).

18DOD, Status of Forces Survey of Active Duty Members (February 2012). This survey 

question had a 91 percent response rate and the margin of error was plus or minus 1 

percent. Survey results do not include responses from members of the Coast Guard and 

Coast Guard Reserve.

19DOD, Status of Forces Survey of Reserve Component Members (June 2009). This 

survey question had a 94 percent response rate and the margin of error was plus or minus 

2 percent. Survey results do not include responses from members of the Coast Guard and 

Coast Guard Reserve.
Page 9 GAO-14-221 Servicemembers Civil Relief Act

Although comprehensive data on the number of servicemembers eligible 

for SCRA are not available, four financial institutions provided us with 

some data on the servicemembers they have identified in their portfolios 

in 2012. According to these data, a small percentage of the financial 

institutions’ total loan portfolios were identified as being eligible for SCRA 

protections. Table 1 details the number of loans held by each of the 

institutions from which we obtained data, including the estimated number 

of loans belonging to servicemembers and the number of loans the 

institutions identified as SCRA-eligible. Collectively, we estimate that the 

financial institutions from which we received useable data service 

approximately 27-29 percent of the mortgages held by servicemembers. 

This estimate is based on information from DOD’s SOF results on the 

estimated percentage of active duty servicemembers and reservists who 

make mortgage payments and the reported and estimated number of 

military borrowers that each of these institutions reported in their 

portfolios.20

Table 1: Total Loans and Known Military and SCRA-Eligible Loans at Selected Institutions, 2012

Total loans

Known number of 

military loans (percent of 

total loans)

Known number of SCRAeligible loans (percent 

of total loans) 

Percent of military loans 

SCRA-eligible 

Financial institution 1 9,467,074 136,350 (1.44%) 17,277 (0.18%) 12.67%

Financial institution 2 8,368,606 64,781 (0.77) 14,568 (0.17) 22.49

Financial institution 3 7,321,325 24,517 (0.33 ) 9,661 (0.13) 39.41

Financial institution 4 170,968 Not available 391 (0.23) Not available

Source: GAO analysis of financial institution data.

Notes: Financial institutions 1 and 2 routinely checked their loan portfolio against the DMDC database 

to identify military borrowers and those who are SCRA-eligible. Financial institutions 3 and 4 only 

checked the military status of borrowers when the borrowers were delinquent on their loans or when 

military borrowers self-identify as such, so those financial institutions’ identification of military and 

SCRA-eligible borrowers likely is an undercount of the total military borrower population in their 

mortgage portfolios. In addition, while the DMDC database that banks use to check military status is 

relatively comprehensive, it has known data issues that could result in some misidentifications of the 

 20We developed this estimate by using DOD’s SOF survey estimate of the percentage of 

active duty military, reservists who have a mortgage, and the size of the active duty and 

reservist population to get an estimated number of active duty servicemembers and 

reservists who have mortgages. We then added the total number of military loans 

identified by three of the four institutions, and used an approximation of military loans 

provided by the fourth institution. Using the estimated number of servicemembers with 

mortgages and the number of identified military borrowers in our institutions’ portfolios, we 

estimated the percentage of the military mortgage population that our sample represents, 

using confidence intervals from the SOF survey to create a range around our estimate. 
Page 10 GAO-14-221 Servicemembers Civil Relief Act

active duty status and SCRA eligibility of servicemembers. See GAO-12-700. All counts should be 

considered approximations only.

Representatives with three of the financial institutions told us they have 

made changes to their data systems over the past 2 years to help better 

identify whether mortgage holders were active duty military and eligible 

for SCRA protections.21

Our analysis of data from three financial institutions suggests that SCRAprotected borrowers were substantially more likely to experience 

delinquency at any time than their non-SCRA-protected military 

counterparts, with one exception. The institutions provided us data with 

substantial inherent limitations that prevented us from fully analyzing the 

repayment practices of their military borrowers. However, the limited data 

allowed us to conduct some analyses of borrowers’ delinquency rates and 

the rates at which delinquent borrowers became current on their 

mortgages. At two servicers, we found that SCRA-protected borrowers 

had delinquency rates from 16 to 20 percent. In contrast, non-SCRAprotected military borrowers had delinquency rates that ranged from 4 to 

8 percent. These rates also varied across time within an institution. 

However, delinquency rates for the large credit union we analyzed were 

They attributed these changes, in part, to DOD’s 

April 2012 upgrade of the DMDC database to allow financial institutions to 

check on the active duty status of up to 250,000 borrowers at once, as 

opposed to checking one individual at a time. Since then, some of the 

institutions had made changes to their systems to use the DMDC 

database to routinely check the military status of borrowers, thereby 

improving their available data on SCRA-eligible borrowers. Of the 

financial institutions we contacted, representatives with two told us that 

they now regularly check their entire loan portfolio against the DMDC 

database. Representatives with the other institutions said that they only 

check the military status of delinquent borrowers. To illustrate the extent 

to which these changes could improve the accuracy of the data on SCRAeligible borrowers, representatives of one financial institution told us they 

used to rely on postal codes to help identify borrowers on or near military 

bases to determine whether they were likely servicemembers. This 

institution has since switched to a data system that allows a check of its 

entire portfolio against the DMDC database so that the institution can 

more accurately identify which borrowers are also servicemembers.

 21We interviewed representatives of five institutions but only were able to obtain useable 

data from four.

SCRA-Protected 

Borrowers Generally Had 

Higher Rates of Mortgage 

Delinquency, with 

Protections Appearing to 

Benefit Some 

Servicemembers
Page 11 GAO-14-221 Servicemembers Civil Relief Act

significantly smaller, and its SCRA-protected borrowers were less likely to 

be delinquent. For example, in the fourth quarter of 2012, 0.01 percent of 

SCRA-protected borrowers at this institution were delinquent on their 

loans, while 0.56 percent of the remaining borrowers in its loan portfolio 

were delinquent. The variation in delinquency rates among these financial 

institutions indicates that factors in addition to SCRA protection likely 

influence an institution’s delinquency rates, including differences among 

each institution’s lending standards and policies or borrower 

characteristics, such as income and marital status.

Although it should be interpreted with caution because the results were 

not consistent at all three institutions for which we could conduct the 

analysis, our data analysis also suggests that borrowers protected by 

SCRA may have a better chance of curing their mortgage delinquency—

making payments sufficient to restore their loan to current status—than 

those without the protections. The summary loan data we obtained from 

one institution show that its SCRA-protected military borrowers who were 

90 or more days delinquent were almost twice as likely to cure their 

delinquency within a year than civilian borrowers and almost five times as 

likely as other military borrowers who were not SCRA-protected. Our 

analysis of loan-level data from another institution also suggested that its 

SCRA-protected borrowers had a higher likelihood of curing their 

mortgage delinquency than military borrowers not SCRA-protected, 

although their chances of curing the delinquency declined after leaving 

active duty.22

Our data analysis also indicates that at least some servicemembers have 

benefitted from the SCRA interest rate cap. As discussed earlier, 

servicemembers must provide written notice to their servicer of their 

active duty status to avail themselves of this provision. Analysis of one 

institution’s data showed that approximately 32 percent of identified 

SCRA-eligible borrowers had a loan with an interest rate above 6 percent 

However, our analysis of data provided by a third institution 

suggested that cure rates for active duty SCRA-protected 

servicemembers were substantially lower than their noneligible active 

duty counterparts. Again, these differences in cure rates among the three 

institutions could reflect differences in institution policies or borrower 

characteristics.

 22To determine the likelihood of curing a loan, we conducted simple and multivariate 

logistic regressions to estimate the probability of different types of borrowers who had 

experienced a delinquency within the data’s time frame becoming current on their loan in 

the next period. See appendix I for more information.
Page 12 GAO-14-221 Servicemembers Civil Relief Act

at origination. According to data provided by this institution—which 

included the initial interest rate and a current interest rate for 9 

consecutive months in 2013—some SCRA-eligible borrowers saw their 

interest rates reduced to 6 percent or less, but almost 82 percent of the 

loans for those eligible for such a reduction retained rates above 6 

percent. However, SCRA-eligible borrowers with interest rates higher 

than 6 percent had a larger average drop in interest rates from origination 

through the first 9 months of 2013 than non-SCRA-eligible military 

borrowers or SCRA-protected borrowers with initial rates below 6 percent. 

We cannot determine how many rate reductions resulted from the 

application of SCRA protections; other potential reasons for rate 

decreases include refinancing or a rate reset on adjustable-rate loans. 

Several financial institutions told us that more servicemembers could 

benefit from the rate cap protection if they provided proof of their active 

duty status to their mortgage servicer. For example, representatives from 

one financial institution told us that they receive military documentation 

(orders, commanding officer letters, etc.) on 31 percent of their SCRAeligible borrowers—as a result, up to 69 percent may not be receiving the 

full financial benefit that SCRA affords.23

The data financial institutions we contacted were able to provide were 

generally not sufficient to assess the impact of the various protection 

periods in effect since the enactment of SCRA: 90 days, 9 months, and 1 

year. Because most of the institutions we interviewed reported that they 

made enhancements to their data systems in 2012 to better identify 

SCRA-eligible borrowers, they were unable to provide data for both 

SCRA-eligible borrowers and a comparison group of other military 

borrowers before the end of 2011, when the protection periods were 

shorter. Furthermore, none of our data that included SCRA-eligible 

borrowers and a comparison group of non-SCRA-eligible borrowers 

covered more than a 1-year span. As a result, the data were insufficient 

to evaluate the effectiveness of SCRA in enhancing the longer-term 

financial well-being of the servicemember leaving active duty or over the 

life of the mortgage. Finally, our measures of financial well-being—

likelihood of becoming delinquent, curing a delinquency, and obtaining a 

reduction in the mortgage interest rate—are not comprehensive 

measures of financial well-being, but were the best measures available to 

us in the data.

 23Some of the borrowers who did not provide documentation to the financial institution 

already may have had mortgage rates lower than 6 percent.

Available Data Are 

Insufficient to Assess 

Different Protection 

Periods, but Mortgage 

Delinquencies Appeared 

to Increase after Active 

Duty
Page 13 GAO-14-221 Servicemembers Civil Relief Act

Our analysis of one servicer’s data suggests that all military borrowers—

SCRA-protected or not—had a higher likelihood of becoming delinquent 

in the first year after they left active duty than when in the military. For 

example, in the loan-level data from an institution that used the DMDC 

database to check the military status of its entire loan portfolio, all of its 

military borrowers had a higher likelihood of becoming delinquent in the 

first year after they left active duty than when in service, with that risk 

declining somewhat over the course of the year for non-SCRA-protected 

military borrowers. Although not generalizeable, these findings are 

consistent with concerns, described below, that servicemembers may 

face financial vulnerability after separating from service. Those who were 

SCRA-protected had a smaller increase in delinquency rates in the first 

year after leaving active duty than other military borrowers, but this may 

be due to SCRA-protected borrowers having their loans become 

delinquent at higher rates before leaving active duty and not to a 

protective effect of SCRA.

Although we were generally unable to obtain data to analyze the impact 

of the varying protection periods, data from one institution provided some 

indication of a positive effect of SCRA protection for servicemembers 

receiving up to a year of protection. Analyzable data from one institution 

on the mortgage status of all its military borrowers for a 9-month period in 

2013, including those who had left active duty service within the last year, 

indicated that SCRA-protected borrowers who were within the 1-year 

protection period after leaving active duty service had a higher chance of 

curing their delinquencies than did the institution’s other military 

borrowers who had left active duty service. We found this effect despite 

this being the same institution where we found that SCRA-eligible 

borrowers were less likely to cure their mortgage delinquencies when still 

on active duty (compared with non-SCRA-eligible borrowers).

Overall, the findings from our data analysis on delinquencies and cure 

rates were consistent with our interviews and past work showing that the 

first year after servicemembers leave active duty can be a time of 

financial vulnerability. We previously reported that while the overall 

unemployment rate for military veterans was comparable to that of nonveterans, the unemployment rate for veterans more recently separated 

from the military was higher than for civilians and other veterans.24

 24GAO, Veterans’ Employment and Training: Better Targeting, Coordinating, and 

Reporting Needed to Enhance Program Effectiveness, GAO-13-29 (Washington, D.C.: 

Dec. 13, 2012).
Page 14 GAO-14-221 Servicemembers Civil Relief Act

Additionally, representatives from the National Guard and Army Reserve 

said that Guard and Reserve members may return to jobs in the civilian 

sector that could be lower paying or less stable than their previous 

military work. Based on a June 2012 DOD SOF survey of Reserve 

component members, an estimated 40 percent of reservists considered 

reemployment, returning to work, or financial stability as their biggest 

concern about returning from their most recent activation or deployment.25

As we reported in 2012, some financial institutions extended SCRA 

protections beyond those stated in the act, as a result of identified SCRA 

violations and investigations in 2011.26 For example, three mortgage 

servicers we included in this review noted that they had reduced the 

interest rate charged on servicemembers’ mortgages to 4 percent—below 

the 6 percent required in SCRA. Additionally, the National Mortgage 

Settlement in February 2012 required five mortgage servicers to extend 

foreclosure protections to any servicemember—regardless of whether 

their mortgage was obtained prior to active duty status—who receives 

Hostile Fire/Imminent Danger Pay or serving at a location more than 750 

miles away from his or her home.27

 25DOD, Status of Forces Survey of Reserve Component Members (June 2012). This 

question was asked to reservists who had been activated in the past 24 months but were 

not currently activated. Estimates from the survey for each category were 16, 12, and 15 

percent, respectively, and have a margin of error of plus or minus 4 percentage points. 

This survey question had a response rate of 20 percent, and survey results do not include 

responses from members of the Coast Guard and Coast Guard Reserve.

As a result, any servicemember 

meeting these conditions may not be foreclosed upon without a court 

order. Two financial institutions we interviewed extended SCRA 

foreclosure protections to all active duty servicemembers. One of the 

financial institutions told us that they have made SCRA foreclosure 

protections available to all active duty servicemembers for the loans that 

26GAO-12-700. In response to deficiencies in the foreclosure process that various 

mortgage servicers publicly announced beginning in September 2010, the Department of 

Justice, Board of Governors of the Federal Reserve System, and Office of the Comptroller 

of the Currency took enforcement actions in 2011 to require mortgage servicers to 

conduct historical reviews of their mortgage loan files. The goals of the reviews included 

determining if servicemembers who were eligible for the SCRA mortgage protections 

received them. If violations were identified, the mortgage servicers were required to 

provide compensation to the servicemembers. Additionally, the Chairman of the House 

Committee on Oversight and Government Reform sent letters in 2011 to 10 residential 

mortgage servicing companies in the United States to request detailed information on their 

SCRA compliance.

27United States v. Bank of America Corp., No. 1:12-CV-00361 (D.D.C. Apr. 4, 2012).
Page 15 GAO-14-221 Servicemembers Civil Relief Act

they own and service (thus, about 16 percent of their mortgage portfolio 

receives SCRA protection). However, officials at this institution said that 

they were bound by investor guidelines for the loans they service for other 

investors, such as Fannie Mae, the Department of Housing and Urban 

Development, and private investors. The officials said that many of the 

large investors have not revised their rules to extend SCRA protections; 

as a result, the institution has been unable to extend SCRA protections to 

all noneligible borrowers whose loans are owned by these entities.28

None of the financial institutions we interviewed advocated for a change 

in the length of time that servicemembers received SCRA protection. 

Officials at one institution told us that they considered a 1-year period a 

reasonable amount of time for servicemembers to gain financial stability 

after leaving active duty and that they implemented the 1-year protection 

period before it became law. One attorney we interviewed who has a 

significant SCRA-related practice supported the extension of the SCRA 

foreclosure protection to 1 year because the revised timeframe matches 

the mortgage interest-rate protection period, which has remained at 1 

year since 2008, when mortgages were added to the SCRA provision that 

limits interest rates to 6-percent.

29 In contrast, a representative of one of 

the military support organizations we interviewed noted that, based on his 

interactions with servicemembers, the effect of extending the foreclosure 

protection from 9 months to 1 year has been negligible, although he also 

said that the extension was a positive development.

 28In August 2013, Freddie Mac adopted guidelines for its loans to extend SCRA 

foreclosure protections to all borrowers who are servicemembers for loans it owned, 

regardless of whether they took out the mortgage prior to becoming active duty military. 

Representatives at one financial institution we spoke with said that other governmentsponsored entities have not followed suit.

29Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, § 2203(b)(1), 122 

Stat. 2654, 2849. Under SCRA, the interest rate on mortgages, and similar debts, taken 

out prior to entering military service is limited to 6 percent for the period of military service 

and 1 year thereafter. 50 U.S.C. app. § 527(a)(1)(A).
Page 16 GAO-14-221 Servicemembers Civil Relief Act

DOD has entered into partnerships with many federal agencies and 

nonprofit organizations to help provide financial education to 

servicemembers, but limited information on the effectiveness of these 

efforts exists. Under SCRA, the Secretaries of the individual services and 

the Secretary of Homeland Security have the primary responsibility for 

ensuring that servicemembers receive information on SCRA rights and 

protections.30 Servicemembers are informed of their SCRA rights in a 

variety of ways. For example, briefings are provided on military bases and 

during deployment activities; legal assistance attorneys provide 

counseling; and a number of outreach media, such as publications and 

websites, are aimed at informing servicemembers of their SCRA rights. 

DOD also has entered into partnerships with many other federal agencies 

and nonprofit organizations to help provide financial education to 

servicemembers. These efforts include promoting awareness of personal 

finances, helping servicemembers and their families increase savings and 

reduce debt, and educating them about predatory lending practices. As 

shown in fig. 1, the external partners that worked with DOD have included 

financial regulators and nonprofit organizations.

31

 30Pub. L. No. 108-109, § 105, 117 Stat. 2835, 2839 (codified at 50 U.S.C. app. § 515); 

see also, National Defense Authorization Act of Fiscal Year 2006, Pub. L. No. 109-163, § 

690, 119 Stat. 3136, 3337.

31In providing technical edits to a draft of this report, officials with the Office of the 

Comptroller of the Currency noted that the agency is seeking to establish itself as one of 

DOD’s financial education partners.

DOD and Various 

Partners Provide 

Financial Education, 

but Limited 

Information on 

Effectiveness of 

Efforts Exists
Page 17 GAO-14-221 Servicemembers Civil Relief Act

Figure 1: External Organizations Acting as DOD Financial Education Partners, as of December 2013

According to DOD officials, these external partners primarily focus on 

promoting general financial fitness and well-being as part of DOD’s 
Page 18 GAO-14-221 Servicemembers Civil Relief Act

Financial Readiness Campaign.32

In addition, DOD officials noted that some partners provide SCRA 

outreach and support to servicemembers. For example, the Bureau of 

Consumer Financial Protection has an Office of Servicemember Affairs 

that provides SCRA outreach to servicemembers and mortgage servicers 

responsible for complying with the act. This agency also works directly 

with servicemembers by collecting consumer complaints against 

depository institutions and coordinating those complaints with depository 

institutions to get a response from them and, if necessary, appropriate 

legal assistance offices. Similarly, nonprofit partners including the 

National Military Family Association, the Association of Military Banks of 

America, and the National Association of Federal Credit Unions provide 

information on SCRA protections to their members. But DOD officials also 

noted that partners are not required by DOD to provide SCRA education, 

and that such education may represent a rather small component of the 

partnership efforts.

For example, partners including the 

Consumer Federation of America, the Better Business Bureau Military 

Line, and the Financial Industry Regulatory Authority’s Investor Education 

Foundation provide financial education resources free of charge to 

servicemembers. DOD and the Consumer Federation of America also 

conduct the Military Saves Campaign every year, a social marketing 

campaign to persuade, motivate, and encourage military families to save 

money every month and to convince leaders and organizations to 

aggressively promote automatic savings. DOD has partnerships with the 

Department of the Treasury and the Federal Trade Commission to 

address consumer awareness, identity theft, and insurance scams 

targeted at servicemembers and their families.

DOD established its financial education partnerships by signing 

memorandums of understanding (MOU) with the federal agencies and 

nonprofit organizations engaged in its Financial Readiness Campaign. 

The MOUs include the organizations’ pledges to support the efforts of 

military personnel responsible for providing financial education and 

financial counseling to servicemembers and their families as well as 

additional responsibilities of the individual partners. According to the 

 32Established in 2003, the campaign was designed to give servicemembers and their 

families a chance to learn more about personal finances and encourage them to better 

manage their money. The campaign is directed toward junior enlisted servicemembers 

who are most at risk and spouses of servicemembers who have not received the personal 

finance information that is part of military training.
Page 19 GAO-14-221 Servicemembers Civil Relief Act

program manager of DOD’s Financial Readiness Program (in the Office 

of Family Policy, Children and Youth, which collaborates with the 

partners), there are no formal expectations that any of the partners 

provide education about SCRA protections. She noted that such a 

requirement would not make sense for some partners, including those 

that do not interact directly with servicemembers but instead provide 

educational materials about financial well-being. The manager said that it 

was important that all of DOD’s partners be aware of the SCRA 

protections, and she planned to remind each of them about the SCRA 

protections in an upcoming partners meeting.

The program manager noted that although her office has not conducted 

any formal evaluations of the partnerships to determine how effective the 

partners have been in fulfilling the educational responsibilities outlined in 

their MOUs, she believes that they have functioned well. According to 

personal financial managers in the individual services (who work with the 

personal financial advisors who provide financial education to 

servicemembers at military installations) and representatives from a 

military association, the education partnerships have been working well 

overall. But they also told us that obtaining additional information about 

the educational resources available through the partnerships and their 

performance would be helpful. For example, one association noted that it 

could benefit from a central website to serve as a clearinghouse for 

educational information from the various financial education partners. 

Staff from another organization said that DOD should regularly review all 

of these partners to ensure they were fulfilling their responsibilities. DOD 

officials told us they would likely discuss these suggestions at upcoming 

meetings with their financial education partners.

The program manager of the Personal Financial Readiness Program also 

noted that to manage the partnerships, she regularly communicates with 

the partners to stay informed of their activities. In addition, she said that 

the Office of Family Policy, Children and Youth has been encouraging 

individual installation commanders to enter into agreements with local 

nonprofit organizations. The local partners would provide education 

assistance more tailored to servicemembers’ situations than the more 

global information the DOD partners provided.

As we noted in our 2012 report, DOD has surveyed servicemembers on 

whether they had received training on SCRA protections, but had not 
Page 20 GAO-14-221 Servicemembers Civil Relief Act

assessed the effectiveness of its educational methods.33 To assess 

servicemembers’ awareness of SCRA protections, in 2008 DOD asked in 

its SOF surveys if active duty servicemembers and members of the 

Reserve components had received SCRA training. Forty-seven percent of 

members of the Reserve components—including those activated in 

2008—reported that they had received SCRA training and 35 percent of 

regular active duty servicemembers reported that they had received 

training.34

In response to our recommendation, as of December 2013, DOD was 

reviewing the results of its recent surveys on the overall financial wellbeing of military families. The surveys have been administered to three 

groups: servicemembers, military financial counselors, and military legal 

assistance attorneys. While the surveys are not focused solely on SCRA, 

they take into account all financial products, including mortgages and 

student loans, covered by SCRA. DOD officials explained that they would 

use the results, including any recommendations from legal assistance 

attorneys, to adjust training and education on SCRA benefits, should such 

issues be identified. Our findings for this report—that many 

servicemembers appeared not to have taken advantage of their ability to 

reduce their mortgage interest rates as entitled—appear to reaffirm that 

DOD’s SCRA education efforts could be improved and that an 

assessment of the effectiveness of these efforts is still warranted.

Without an assessment of the effectiveness of its educational 

methods (for example, by using focus groups of servicemembers or 

results of testing to reinforce retention of SCRA information), we noted 

that DOD might not be able to ensure it reached servicemembers in the 

most effective manner. We recommended that DOD assess the 

effectiveness of its efforts to educate servicemembers on SCRA and 

determine better ways for making servicemembers aware of their SCRA 

rights and benefits, including improving the ways in which reservists 

obtain such information.

 33GAO-12-700. Under SCRA, the service Secretaries have primary responsibility for 

ensuring that written information on SCRA rights and benefits is provided to 

servicemembers. 50 U.S.C. app. § 515.

34DOD, Status of Forces Survey of Active Duty Members (August 2008) and Status of 

Forces Survey of Reserve Component Members (November 2008). The margin of error 

for active duty servicemembers and Reserve component members is plus or minus 2 

percent. Survey results do not include responses from members of the Coast Guard and 

Coast Guard Reserve.
Page 21 GAO-14-221 Servicemembers Civil Relief Act

We provided a draft of this report to the Department of Defense, the 

Board of Governors of the Federal Reserve System, the Office of the 

Comptroller of the Currency, and the Bureau of Consumer Financial 

Protection for comment. The Department of Defense and the Office of the 

Comptroller of the Currency provided technical comments that were 

incorporated, as appropriate.

We are sending copies of this report to interested congressional 

committees. We will also send copies to the Chairman of the Board of 

Governors of the Federal Reserve System, the Secretary of Defense, the 

Comptroller of the Currency, and the Director of the Consumer Financial 

Protection Bureau. In addition, this report will be available at no charge on 

the GAO web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-8678 or EvansL@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix II.

Lawrance L. Evans, Jr.

Director, Financial Markets

and Community Investment

Agency Comments 
Appendix I: Objectives, Scope, and 

Methodology

Page 22 GAO-14-221 Servicemembers Civil Relief Act

This report examines (1) available information on changes in the financial 

well-being of servicemembers who received foreclosure-prevention and 

mortgage-related interest rate protections under SCRA, including the 

extent to which servicemembers became delinquent on their mortgages 

after leaving active duty and the impact of protection periods;1 and (2) the 

Department of Defense’s (DOD) partnerships with public- and privatesector entities to provide financial education and counseling about SCRA 

mortgage protections to servicemembers and views on the effectiveness 

of these partnerships.2

To assess changes in the financial well-being of servicemembers who 

receive SCRA mortgage protections, including the extent to which 

servicemembers became delinquent on their mortgages after leaving 

active duty and the impact of protection periods, we analyzed legislation 

and reviewed our prior work on SCRA. We obtained and analyzed loanlevel data, institution-specific summary data, or both, from four financial 

institutions (three large single-family mortgage servicers and a large 

credit union). A fifth institution (a large single-family servicer) we 

contacted was unable to provide us with data for inclusion in our review. 

We did not identify financial institutions to protect the privacy of individual 

borrower data. Table 2 provides a summary of the data we obtained.

 1

Pub. L. No. 108-189, 117 Stat. 2835 (codified as amended at 50 U.S.C. app. §§ 501 –

597b).

2

The Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, 

Pub. L. No. 112-154, § 710(e), 126 Stat. 1165, 1209, mandates that GAO (1) report on 

the impact of the mortgage-related protections and the varying periods during which 

servicemembers receive protection from foreclosure and (2) assess the partnerships 

established by the Secretary of Defense to provide servicemembers with financial 

education and counseling. Limitations in the availability and quality of financial institution 

data restricted our reporting objectives and our analysis of the various SCRA protection 

periods. Consequently, we developed reporting objectives consistent with these

limitations, and we have noted specific data limitations throughout this report, as 

appropriate.

Appendix I: Objectives, Scope, and 

Methodology

Information on Changes in 

the Financial Well-Being of 

Servicemembers with 

SCRA Protections
Appendix I: Objectives, Scope, and 

Methodology

Page 23 GAO-14-221 Servicemembers Civil Relief Act

Table 2: Summary of Data Obtained from Selected Institutions

Data type Financial institutions

1

Loan-level

2

Loan-level

3

Loan-level and Summary

4

Summary

Time frame Monthly, Jan. - Sept. 

2013

Year end, 2011 - 2012 Quarterly, 2007 Q1 - 2013 

Q3

Q4 2012, Q2 2013

Comparison

group

Non-SCRA military Identified non-SCRA 

military

Loan-level: no comparison 

group; summary data: 

remainder of portfolio

Non-SCRA military and all

borrowers

Identification of 

military

Check military status of

all borrowers against 

DOD information

Identifies military when 

initiating foreclosure 

proceedings, or when 

notified by borrower

Identifies military when 

initiating foreclosure 

proceedings, or when 

notified by borrower

Check military status of all 

borrowers against DOD 

information 

Financial wellbeing dataLoan status, credit 

scores

Loan status Loan status Loan delinquency and 

cure rates

Interest rate 

data

Provided interest rate at 

origination and currently

Not provided Not provided Not provided

Source: GAO analysis of financial institution data.

We conducted a quantitative analysis of the data, which included 

information on (1) loan history, including loan status and total fees; (2) 

loan details such as the loan-to-value ratio and principal balance; and (3) 

financial outcomes of borrowers, such as initial and updated credit scores 

and whether the borrowers filed for bankruptcy or cured mortgage 

defaults. After controlling for loan and demographic characteristics and 

other factors to the extent that such data were available, we developed 

logistic regression models to estimate the probability of different 

populations becoming delinquent on their mortgage and curing their 

mortgage delinquency (by bringing their payments current). The 

estimates from these models may contain some degree of bias because 

we could not control for economic or military operations changes, such as 

changes in housing prices or force deployment that might affect a 

servicemember’s ability to repay a mortgage.

Our analysis is not based on a representative sample of all 

servicemembers eligible to receive SCRA mortgage protections and 

therefore is not generalizable to the larger population. Moreover, we 

identified a number of limitations in the data of the four financial 

institutions. For example, the various servicer datasets identify SCRA 

status imperfectly and capture activity over different time periods with 
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-14-221 Servicemembers Civil Relief Act

different periodicities. We also cannot rule out missing observations or 

other inaccuracies.3 Other issues include conflicting data on SCRA 

eligibility, data reliability issues related to the DOD database used to 

identify servicemembers (which is operated by the Defense Manpower 

Data Center, or DMDC), data quality differences across time within a 

given servicer’s portfolio, and data artifacts that may skew the 

delinquency statistics for at least one institution. Lastly, as servicer 

systems vary across institutions, none of the servicers from which we 

requested data provided us with every data field we requested for our 

loan-level analysis. Due to the differences in the data provided by each 

institution, we conducted a separate quantitative analysis of the data from 

each institution that provided loan-level data. To the extent that data were 

available, we also calculated summary statistics for each institution on the 

changes in financial well-being of the servicemembers, which allowed for 

some basis of comparison across institutions in levels of delinquency and 

cure rates.4

Furthermore, we analyzed data from DOD’s Status of Forces (SOF) 

surveys from 2007 to 2012, which are administered to a sample of active 

duty servicemembers and reservists on a regular basis and cover topics 

such as readiness and financial well-being. We determined the survey 

data we used were sufficiently reliable for our purposes. We also 

analyzed DOD data on the size of the active duty military population and 

DOD survey data to estimate the percentage of servicemembers who 

To conduct as reliable analyses as the data allowed, we also 

corrected apparent data errors, addressed inconsistencies, and 

corroborated results with past work where possible. Through these 

actions, and interviews with knowledgeable financial institution officials, 

we determined that the mortgage data and our data analysis were 

sufficiently reliable for the limited purposes of this report. However, 

because some servicer practices related to SCRA have made it difficult to 

distinguish SCRA-protected servicemembers from other military 

personnel, the relative delinquency and cure rates we derived from these 

data represent approximations, are not definitive, and should be 

interpreted with caution.

 3

Our sample of financial institutions included servicers that were cited by banking 

regulators in 2011 for errors in foreclosure processing, including failures to provide SCRA 

protections to eligible servicemembers.

4

We have insufficient data to evaluate the causes of the wide differences in delinquency 

and cure rates across institutions—for instance, we were unable to account for many 

factors that can determine a borrower’s chances of experiencing delinquency and of 

curing a delinquency.
Appendix I: Objectives, Scope, and 

Methodology

Page 25 GAO-14-221 Servicemembers Civil Relief Act

make payments on a mortgage and may be eligible for SCRA protections, 

and the percentage of military borrowers that our sample of borrowers 

from selected financial institutions covers.

Lastly, we also interviewed two lawyers with knowledge of SCRA, five 

selected financial institutions, DOD officials (including those responsible 

for individual military services, the Status of Forces Surveys, and a 

database of active duty status of servicemembers), and representatives 

of military associations and selected financial institutions to obtain 

available information or reports on the impact of SCRA protections on the 

long-term financial well-being of servicemembers and their families.

To examine the effectiveness of DOD’s partnerships, we analyzed 

documentation on DOD’s partnerships with public and private entities that

provide financial education and counseling to servicemembers. For 

example, we reviewed memorandums of understanding DOD signed with 

the federal agencies and nonprofit organizations engaged in its Financial 

Readiness Campaign. We reviewed the nature of such partnerships, 

including information or efforts related to SCRA mortgage protections.

We also conducted interviews with DOD officials, including the program 

manager of DOD’s Personal Financial Readiness Program and personal 

financial managers in each of the individual military services; selected 

DOD partners that provide SCRA-related education to servicemembers; a 

military support association; and two lawyers with knowledge of SCRA. 

We asked about how such partnerships provide SCRA mortgage 

education and counseling and gathered views on and any assessments 

of the partnerships’ effectiveness.

We conducted this performance audit from June 2013 to January 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

Information on DOD 

Partnerships
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 26 GAO-14-221 Servicemembers Civil Relief Act

Lawrance L. Evans, Jr., (202) 512-8678 or EvansL@gao.gov

In addition to the contact named above, Cody Goebel, Assistant Director; 

James Ashley; Bethany Benitez; Kathleen Boggs; Abigail Brown; Rudy 

Chatlos; Grant Mallie; Deena Richart; Barbara Roesmann; and Jena 

Sinkfield made key contributions to this report.

Appendix II: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(250728)
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