Two Major Banks Agree To Pay $22m For Wrongful Foreclosures
Morgan Stanley and Bank of America units have reached a settlement of $22.4 million, to resolve allegations that they improperly foreclosed on over 160 soldiers between 2006 and 2009, according to Bloomberg. The active duty soldiers, some of whom had suffered massive and disabling injuries, faced having their homes taken from them wrongfully, without first obtaining court orders. Bank of America will pay $20 million to resolve allegations it wrongfully foreclosed on 160 soldiers. Morgan Stanley’s Saxon Mortgage Services will pay $2.35 million to settle claims it improperly foreclosed on 17 soldiers’ homes. The Justice Department said that the foreclosures were in violation of the Sevicemembers Civil Relief Act, which is supposed to shield deployed military personnel from financial stress.
In a related matter, JP Morgan Chase & Company reached a deal last month to pay $27 million to some 6,000 soldiers who were overcharged on their mortgages, cut interest rates on their home loans and return homes that were wrongfully foreclosed upon, according to settlement papers filed in federal court in Beaufort, South Carolina.