[Federal Register Volume 72, Number 57 (Monday, March 26, 2007)]
[Notices]
[Pages 14130-14132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5412]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5133-N-01]


Mortgage and Foreclosure Rights of Servicemembers Under the 
Servicemembers Civil Relief Act: Informational Notice

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: This notice provides information regarding the homeowner 
notification requirement of section 106(c)(5) of the Housing and Urban 
Development Act of 1968. The Servicemembers Civil Relief Act (SCRA) 
provides legal rights and protections that are applicable to the debts 
of servicemembers and their dependents. Notice is to be provided to all 
homeowners who are in default in order to inform them of mortgage and 
foreclosure rights available to them under the SCRA if they are 
servicemembers or dependents of servicemembers. HUD has developed, in 
consultation with the Departments of Defense and Treasury, a final 
disclosure form to be used by mortgagees for fulfilling this notice 
requirement. HUD made the form available on its website in July 2006, 
and the form is also attached as an appendix to this notice.

FOR FURTHER INFORMATION CONTACT: Leslie Bromer, Mortgage Servicing 
Specialist, Asset Management and Disposition Division, Office of Single 
Family Housing, Office of Housing, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Room 9180, Washington, DC 20410-
8000; telephone (202) 708-1672 (this is not a toll-free number). 
Individuals with speech or hearing challenges may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at (800) 877-8339.
    Questions regarding this notice may also be directed to the 
National Servicing Center in Oklahoma City, Oklahoma, at (888) 297-
8685.

[[Page 14131]]

Individuals with speech or hearing challenges may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    The Servicemembers Civil Relief Act (50 U.S.C. app. 501 et seq.) 
(SCRA) provides various protections to active duty military members and 
reservists, or members of the National Guard called to active duty, 
and, in limited situations, dependents of military members. The SCRA is 
intended to ease the economic and legal burdens on military personnel 
by postponing, suspending, or mitigating obligations, such as mortgage 
payments and foreclosure actions. Section 688 of the National Defense 
Authorization Act for Fiscal Year (FY) 2006 (Pub. L. 109-163, approved 
January 6, 2006) (NDAA) amended the required content of notifications 
of homeownership counseling availability under section 106(c)(5)(A)(ii) 
of the Housing and Urban Development Act of 1968 (12 U.S.C. 
1701x(c)(5)(A)(ii)) and directed HUD to issue a final disclosure form 
to be used by mortgagees in fulfilling the notice requirement.

II. HUD Notice of Servicemembers Rights Under SCRA

    Pursuant to the NDAA amendment, HUD has developed, in consultation 
with the Departments of Defense and Treasury, the final disclosure form 
for the required notice of servicemember rights. The form is located in 
the appendix to this notice. The form was also earlier made available 
on HUD's Web site in July 2006 and can be found at http://www.hudclips.org/sub_nonhud/html/pdfforms/92070.pdf. All mortgage 
loans, including conventional mortgages and mortgages insured by HUD, 
are subject to the notification requirement. The notice is required to: 
(1) Be sent to all homeowners who are in default on a residential 
mortgage; (2) include the toll-free Military OneSource number (800-342-
9647) to call if servicemembers or their dependents require further 
assistance; and (3) be made within 45 days from the date a missed 
payment was due, unless the homeowner pays the overdue amount before 
the expiration of the 45-day period.

III. Rights and Protections Under the SCRA

    The SCRA provides, among other things, that a debt incurred by a 
servicemember, or by a servicemember jointly with a spouse, prior to 
entering military service, shall not bear interest at a rate above six 
percent during the period of military service. (See section 207(a)(1) 
of SCRA.) Servicemembers become eligible for the interest rate 
limitation by providing to the creditor with written notice, a copy of 
the military orders calling the servicemember to active duty, and any 
orders further extending military service, not later than 180 days 
after the date of the servicemember's termination or release from 
military service. (See section 207(b)(1) of SCRA.) Upon receipt, the 
creditor must limit interest on the obligation to no more than six 
percent per year, effective as of the date on which the servicemember 
is called to military service. (See section 207(b)(2) of SCRA.) Only a 
court may grant the creditor an exception to the interest rate 
limitation, which may only be granted if in the opinion of the court 
the ability of the servicemember to pay interest on the obligation or 
liability at a rate in excess of six percent per year is not materially 
affected by reason of the servicemember's military service. (See 
section 207(c) of SCRA.)
    In a legal action to enforce a debt against real estate that is 
filed during, or within 90 days after the servicemember's military 
service, a court may stay the proceedings for a period of not less than 
90 days or may adjust the debt. (See section 202(b)(1) of SCRA.) In 
addition, the sale, foreclosure, or seizure of real estate shall not be 
valid if it occurs during or within 90 days after the servicemember's 
military service unless the creditor has obtained a court order 
approving the sale, foreclosure, or seizure of the real estate. (See 
section 303(c) of SCRA.)
    In addition to the rights described above, the SCRA provides some 
additional legal protections. HUD, however, is not in a position to 
interpret or provide information on all of the various provisions of 
the SCRA as they may affect the rights afforded creditors and 
servicemembers. Such interpretations should be obtained for the 
Department of Defense or should be determined by the courts.

IV. Verification of Military Service

    Creditors who are otherwise unable to verify a debtor's military 
status may request and obtain a statement as to military service from 
the Department of Defense, pursuant to section 602 of the SCRA (50 
U.S.C. app. 582). To facilitate SCRA searches, the Department of 
Defense's Manpower Data Center (DMDC) has developed a secure public 
internet access system through which any requester can quickly 
determine whether an individual is currently in the armed forces. The 
Web site for SCRA queries is http://www.dmdc.osd.mil/owa/scra/home. The 
requester must provide the Social Security Number (SSN) and a last 
name. First name, middle name, birth year, and birth month are 
optional.
    A report is executed by clicking the ``LookUp'' tab on the query 
form. If the provided SSN and other identifying information match the 
name of a person currently on active duty, the DMDC response report 
will provide the named individual's branch of military service and 
``begin date'' of Active Duty status. If the provided SSN is matched to 
the name of a person on active duty but the last name and/or birth date 
entered do not match the information recorded for that individual, the 
DMDC response report page states, ``Based on the social security number 
you have provided, the individual is currently on Active Duty. However, 
the name or partial DOB, or both provided do not match the individual 
against whom the social security number is assigned.'' If the DMDC does 
not have information regarding whether the name of the identified 
person is on active duty, the response report will only list the 
supplied name with the text, ``Based on the information you have 
furnished, the DMDC does not possess any information indicating the 
individual is currently on active duty.''
    There is no charge for the online SCRA queries and no 
authorization, user ID, or password is required. Requesters needing 
assistance may fax a request for a statement as to military service to 
DMDC at (703) 696-4156, or call (703) 696-6762.

V. Paperwork Reduction Act Statement

    The information collection requirements contained in this document 
have been approved by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned 
OMB control number 2502-0565. In accordance with the Paperwork 
Reduction Act, HUD may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the 
collection displays a currently valid OMB control number.


[[Page 14132]]


    Dated: March 16, 2007.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.

Appendix

United States Department of Housing and Urban Development 
Servicemembers Civil Relief Act Notice

Legal Rights and Protections Under the SCRA

    Servicemembers on ``active duty'' or ``active service,'' or a 
dependent of such a servicemember may be entitled to certain legal 
protections and debt relief pursuant to the Servicemembers Civil 
Relief Act (50 U.S.C. App. 501, et seq.) (SCRA).

Who May Be Entitled to Legal Protections Under the SCRA

    <bullet> Active duty members of the Army, Navy, Air Force, 
Marine Corps, Coast Guard, and active service National Guard;
    <bullet> Active service members of the commissioned corps of the 
National and Atmospheric Administration;
    <bullet> Active service members of the commissioned corps of the 
Public Health Service;
    <bullet> United States citizens serving with the armed forces of 
a nation with which the United States is allied in the prosecution 
of a war or military action; and
    <bullet> Dependents of the above (e.g., spouse or children).

What Legal Protections Are Servicemembers Entitled to Under the 
SCRA?

    <bullet> The SCRA states that a debt incurred by a service 
member, or spouse jointly, prior to entering military service shall 
not bear interest at a rate above 6 percent during the period of 
military service.
    <bullet> The SCRA states that in a legal action to enforce a 
debt against real estate that is filed during, or within 90 days 
after the servicemember's military service, a court may stop the 
proceedings for a period of time, or adjust the debt. In addition, 
the sale, foreclosure, or seizure of real estate shall not be valid 
if it occurs during, or within 90 days after the servicemember's 
military service unless the creditor has obtained a court order 
approving the sale, foreclosure, or seizure of the real estate.

How Does a Servicemember or Dependent Request Relief Under the 
SCRA?

    <bullet> A servicemember or dependent, or both, may request 
relief under the SCRA by providing the lender a written notice with 
a copy of the servicemember's military orders. (Note: Lender should 
place its name, address, and contact information here.)

How Does a Servicemember or Dependent Obtain Information About the 
SCRA?

    <bullet> The U.S. Department of Defense's information resource 
is ``Military OneSource.'' Web site: http://www.militaryonesource.com
    The toll-free telephone number for Military OneSource are:
    [cir] From the United States: 1-800-342-9647.
    [cir] From outside the United States (with applicable access 
code): 800-3429-6477.
    [cir] International Collect (through long distance operator): 1-
484-530-5908.
    <bullet> Servicemembers and dependents with questions about the 
SCRA should contact their unit's Judge Advocate, or their 
installation's Legal Assistance Officer. A military legal assistance 
office locator for each branch of the armed forces is available at 
http://legalassistance.law.af.mil/content/locator.php.
[FR Doc. E7-5412 Filed 3-23-07; 8:45 am]
BILLING CODE 4210-67-P