This last provision is not automatic and must be requested by the service member. For example, a service member with a mortgage must request the temporary interest rate reduction and submit several documents, including a written request to his or her mortgage lender, a notice indicating he or she has been called to active duty, and a copy of military orders.
"The amount above the 6 percent cap is completely forgiven during the period the cap is in place," says U.S. Army Col. Shawn Shumake, an Army lawyer and director of the Office of Legal Policy for the Undersecretary of Defense for Personnel and Readiness.
Traditionally, the cap has only applied during periods of active duty. In 2008, the SCRA was amended to extend the cap for preservice mortgage-type obligations to one year after leaving active duty.
However, Shumake adds, "once the period of the cap ends, then the original interest rate may once again be charged."
Military Lending ActIn 2007, the Department of Defense initiated new predatory lending regulation that limits the fees and interest lenders can charge for payday loans, vehicle title loans and tax refund anticipation loans.
The regulation limits the annual percentage rate of these loans to 36 percent and requires all fees (with a few exceptions) be included in the cap.
Joint Federal Travel Regulations
The Joint Federal Travel Regulations -- which dictate rules for monetary allowances associated with military travel and transfers -- have a specific provision that helps service members whose landlords face foreclosure.
"The Joint Federal Travel Regulations establishes that local moves can be paid for by the military if a service member is forced to move because the service member's landlord has been foreclosed on," Shumake says.