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Petraeus takes off the gloves

By Jay MacDonald · Bankrate.com
Monday, July 18, 2011
Posted: 9 am ET

Just six months into her job as assistant director of the Office of Servicemember Affairs at the Consumer Financial Protection Bureau, Holly Petraeus is kicking butts and taking names of mortgage lenders who dare to mess with America's military families.

Last week, Petraeus, the wife of Gen. David Petraeus and daughter of Gen. William Knowlton, formally dressed down Bank of America, JPMorgan Chase, Saxon Mortgage and others at a joint Congressional forum on illegal service member foreclosures before the Committee on Oversight and Government Reform.

Holly Petraeus delivers tough talk to mortgage lenders. The question is, will they listen?

Her appearance coincided with the release of a Congressional report, "Fighting on the Home Front: The Growing Problem of Illegal Foreclosures Against U.S. Servicemembers," that fueled her tough talk.

Several mortgage servicing companies recently admitted to multiple violations of the Servicemembers Civil Relief Act, or SCRA, including foreclosing on service members who were deployed in Iraq and Afghanistan.

SCRA was passed in 2003 to protect active-duty service personnel from improper foreclosures, evictions and other financial consequences of military service. When a service member is called to active duty, SCRA has their back, lowering to 6 percent the interest rate on their mortgage and credit card loans. In 2009, Congress expanded protections under the little-known Homeowners Assistance Program to protect service members from calamitous loss due to the collapse of the housing market.

Petraeus expressed her outrage that any financial institution would ignore these protections.

"Service members should not have to struggle to get the protections they are due under the law. A National Guard wife once told me that her husband had been activated three times, and each time she had had to fight with their bank for months to get the SCRA interest rate reduction applied," she told the forum.

"As we've seen from the recent settlements with Bank of America, Saxon Mortgage and JPMorgan Chase over SCRA-related incidents, experiences like hers, reflecting lenders’ lack of compliance with other SCRA protections, have been far too common."

Petraeus noted that although foreclosure is devastating for any family, it's a "terrible situation" for military families -- both the family back home and the deployed service member who feels helpless to take action to prevent it.

While she acknowledged that the CFPB will not enforce SCRA (that job falls to the Civil Rights Division of the Department of Justice), Petraeus pledged to make her office a conduit through which service member complaints are routed to the appropriate agency.

Mortgage lenders, you've been served: Mess with Holly Petraeus at your peril.

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37 Comments
Chuck
September 14, 2011 at 1:15 pm

Sara,
Where is your sense of patriotism these men and women are called to duty in alot of cases from a higher paying civilian job, they then go and serve our country. In the mean time they dont get paid their normal salary. Which is what they use to get approved for their mortgage. If we don't protect them who will we get to serve.

Sarah
September 14, 2011 at 9:06 am

I understand that military families should be protected, however, why aren't all homeowners that are struggling being treated the same? I don't think reducing mortgage interest rates for military is fair when they are drawing a paycheck unlike others who don't have that stability.

sweetcraver
September 13, 2011 at 11:03 pm

Yayyyyyyy!!!

Obama knows who to pick. Kick ass and take names, folks.

L Lynch
September 13, 2011 at 9:38 pm

If Petraeus's wife is as big a self-centered egotist as her husband, I would not pay much attention to her either. He was not
thought that well of, by the guys in Afghanistan. Too much EGO and not enough "Of the troops, By the troops, For the troops". Just another loose Ego as far as the warriors are concerned.

THE Reality Tsar
September 12, 2011 at 1:40 pm

The banks did not cause the mortgage crisis, Fannie Mae, Freddie Mac, the fed, HUD, the Justice Department, and the community reinvestment act. Required banks and mortgage brokers to make subprime loans to people (frankly, mostly minorities), who never had any prayer of paying back loans.

Fannie and Freddie then bought those loans from the banks and mortgage brokers, "bundled them" and sold them to the investment banks who in turn use them as collateral in mortgage-backed securities, which were sold. Any mortgage that Fannie and Freddie sold came with an implicit government guarantee as to principal and interest payments.

If there were legal action the people going to jail should be Barney Frank, Chris Dodd, Harold Raines, Andrew Cuomo, Janet Reno, and the rest of the nice people who aided and abetted the scam for their political advancement.

Alan Walsh
September 11, 2011 at 3:48 am

In addition to causing the mortgage derivative mess in the first place, the banks have abused homeowners, ignored government relief programs, and generally done whatever they want ever since. Yet, government does little besides give lip service. There should have been some serious legal actions going on long ago.