On August 6, 2012, President Obama signed into law another extension to the protections from nonjudicial foreclosure afforded to members of the military under the federal Servicemembers’ Civil Relief Act (Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, or the “Act”). Prior to the Act, the SCRA prohibited nonjudicial foreclosures on mortgage loans to active-duty members of the military, both during military service and for nine months after termination of active service. The Act extends these protections from nine months to one year following the end of military service. This extension takes effect on February 2, 2013.
Section 303 of the SCRA, 50 U.S.C. app. § 533, generally prohibits the “sale, foreclosure, or seizure” of real or personal property owned by a servicemember securing a debt that originated before the servicemember entered military service without a court order. When the SCRA was first enacted in 2003, this provision prevented foreclosures while the servicemember was on active duty and for ninety days after end of service. The Housing and Economic Recovery Act of 2008, which took effect on July 30, 2008, extended the term of post-service foreclosure protections from ninety days to nine months. Congress intended this to be a short-term extension, establishing December 31, 2010 as the extension’s expiration date, at which time the law was to have returned to the ninety-day post-service protection window. However, on December 29, 2010, this expiration date was moved to December 31, 2012 by the Helping Heroes Keep Their Homes Act of 2010.
The Act extends for another two years—to December 31, 2014—the date on which the SCRA will revert to its original ninety-day post-service protection window. Consequently, unless Congress acts again, the chronology of SCRA’s post-service protection periods against nonjudicial foreclosure is:
• December 19, 2003 to July 29, 2008: 90 days
• July 30, 2008 to February 1, 2013: 9 months
• February 2, 2013 to December 31, 2014: 1 year
• January 1, 2015 and thereafter: 90 days
In an apparent effort to determine the appropriate permanent statutory period, the Act also directs the Government Accountability Office to conduct a study of foreclosures on servicemembers’ properties attempted or conducted between August 2007 and August 2012. Among other requirements, the GAO is to assess, by January 2014, how many servicemembers were faced with foreclosure 90 days, 9 months, or 1 year after the conclusion of their military service. Once the GAO makes this report, Congress may reevaluate the appropriate duration of the post-service protection window.