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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
Steven Boyle
September 10, 2011 at 1:10 am

Go get'em, Holly!

Bobby Morgan
September 08, 2011 at 11:51 am

That is a lady who has my vote. Must be the only one in D.C. who knows what she is doing. Sarah needs to look to her to see a momma grizzly in action. The service needs more like in Washington. GO LADY GO!!!!!!!!!!!!!!!!!!!

JAQUEBAUER
September 08, 2011 at 8:38 am

ANY institution that forecloses on a service members home should be made to waive the remaining balance and issue the deed free and clear to the home owner. This should be a US law. I bet these crooks wake up and treat our finest with respect and grace.

CS Barnett
September 08, 2011 at 12:49 am

Good for Mrs. Petraeus. I'm afraid, these large banks seem to be so detached from the realities of America, feel so unconscionably
entitled and above all consideration for accounting and doing
what is responsible on several levels, after the American taxpayer saved them and continue to absorb the consequences, they have to be brought to task.Not to scrupulously support our troops evidences the fact they do not seem to understand that it is our Military that enables them to be Free and to function within the freest country in the world. Mrs. Petraeus might want to put a lecture series into effect for these CEO's and explain what is what.I salute her.

Sully
September 07, 2011 at 10:48 am

I don't know what the sanctions are for violations of these military protective laws, but I certainly hope they are strong enough to remove these bankers from their positions forever. This certainly has to be a felony of some sort, and I don't think that banking institutions hire or keep felons on their payroll. These bankers are traitors to our country to say the least, they should be treated as such.

Sam What Am
September 05, 2011 at 5:27 pm

There has been a "GI Bill of Rights" of some sort for 50 years. I can't believe that any bank is so incompetent as to know that they CANNOT foreclose on the home of a service menber thats overseas. Yes, a lot of reservists take a tremendous pay cut when they are called up. In some cases, the home spouse has to decrease their work hours, or pay more for childcare, when a spouse is deployed. And very simply, somebody trying to stay alive in Afghanistan can't take the day off to sit on hold with Bank of America "Customer Service" even if they are not far away, in India.

Mekhong Kurt
September 01, 2011 at 3:43 am

Wilbur, you wrote,, in part, onAugust 13, 2011 at 10:05 pm, "And any of you Liberals out there that dont like this, get off your dead asses a join yourself and see how you like it."

I'm a social liberal/fiscal conservative -- and one of the strongest supporters of our military around. Your remark is incorrect, out of order, and sure draws fire from me and people like me who don't fit your prejudiced idea about who and what we are.

Get over it, Wilbur: NO single group has a corner on patriotism. I'm willing to accept the genuineness of yours. Please afford me the same courtesy and and accept and respect *mine.* Your remark is deeply offensive.

Mekhong Kurt
September 01, 2011 at 3:36 am

John, on August 12, 2011 at 11:38 am, you wrote, "Why should military people have any more protection than other citizens? All people in the military are there on a voluntary basis and no one forced them to join. If they can't handle their financial obligations with the military pay then get another job."

First, though the story doesn't say so, I think this law (though I don't know this for absolutely sure) is aimed at protecting reservists and National Guard folks who do have jobs but end up losing at least their salaries after a certain period of time when they've been activated then sent off to war (and some lose their jobs, even when they manage to get back unharmed and without suffering from combat-induced mental hangups. These people go out on even a longer limb, in a way, than those who volunteer for full-time duty. For regulars, their jobs are their full-time jobs until they finish their enlistments or retire. On the other hand, reservists and NG folks have civilian jobs from which they can be yanked virtually without warning.

Secondly, the military has had to depend on these folks more than the Pentagon or those in the reserves of the Guard ever anticipated. If you are moonlighting for, let's say, a multinational corporation and your boss informs you suddenly, "We're tranferring you to Kuwait immediately," *you* can quit. No such luck for these men and women. For that matter, at your full-time job, unlike a full-time military person, you can just quit in a similar scenario. The enlistee, on the other hand, has to just suck it up when he or she is told, "Congratulations! We're sending you off to scenic Bagdhad/Kabul, where you'll get to meet all sorts of locals and learn about their exotic cultures! Oh, by the way, a bunch of them would just LOVE to kill you! Enjoy!" And off that person goes, powerless to quit.

Lastly, lenders know the drill when they make the loans, many times. In the cases of they made the loans before the borrower enlisted for any kind of kilitary service, they -- the lenders -- are still bound by law. Military personnel stand 24/7/365 facing the potential of getting sent into harm's way -- 24/7/365 while they're in a combat zone (including non-combat troops). And that's true of reservists and members of the Guard, too. There's no civilian job that is the same. Even frontline law enforcement officers -- for whom I have the utmost respect -- get to go home at the end of their shifts. Not to a tent in the middle of god-forsaken desert or some such. With people maybe shooting at them.

Those sharing your opinion better figure out you folks are in a small minority. While most of us would like to see our military spending reined in, throwing service members under the bus regarding their mortgages is one of the LAST places we'd like to see such spending reduced. Ditto the VA hospitals, by the way.

If my Congressman or my Senators were to tell me they were going to introduce spending legislation specifically for lower-ranking officers and lower-ranking NCO's-enlisted military personnel, though my taxes are already high, for the troops I'd swallow, and tell my elected representatives to go for it with my blessings and full support. And tell them to send the bill.

Mekhonbg Kurt
September 01, 2011 at 3:13 am

I really enjoyed this story, as I've long admired Ms. Patraeus' Father -- but didn't know about her at all.

Except for three years in college ROTC, I never had the privilege of serving, but I've been a strong supporter and fellow traveler of our men and women in uniform. When I finished reading this story, i leaned back, punched the sky, and said, "You go get 'em, Ma'am!"

Great lady taking a great stand -- and a grat story ab out it.

Mekhonbg Kurt
September 01, 2011 at 3:10 am

@DaveNYUSA, the story has zero to do with the President. If you don't like him -- fine. But stick to the point instead of just trolling all over the web, and do us all a favor, okay?