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.
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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