The federal government and some states, including Massachusetts, have enacted laws that protect military servicemembers from foreclosure. The Servicemembers Civil Relief Act (SCRA) is the main federal law that provides legal rights to servicemembers who are on active duty. Massachusetts law ensures that a foreclosing bank doesn’t violate the SCRA when conducting a foreclosure.
Read on to learn about foreclosure protections for servicemembers under the SCRA and how Massachusetts ensures compliance with this law. (For information about other protections that the SCRA provides, see Legal Protections for America's Military: The Servicemembers Civil Relief Act.)
The federal SCRA provides financial and legal protections for active-duty service members, including National Guard and reserve members, as well as their families. For instance, the SCRA gives certain types of legal relief to military personnel who are in danger of foreclosure. The kind of protection you’ll get generally depends on whether you took out your mortgage loan before or after military service.
If you took out your mortgage loan before military service, the bank can't foreclose nonjudicially. Under the SCRA, no sale, foreclosure, or seizure of property for nonpayment of a pre-service mortgage debt is valid if made during, or within one year after, military service, unless:
Also, a court can decide to delay (the legal term is “stay”) a foreclosure proceeding for a while—or adjust your mortgage by reducing payments or suspending payments entirely, for example—if your ability to comply with the mortgage obligation is materially affected by your military service. (50 U.S.C. App. § 533).
Protection against default judgments. If you took out your mortgage loan after going on active duty, a different SCRA protection can help you if the foreclosure is judicial. A court generally can’t enter a default judgment (an automatic win for the lender if you don’t respond to a lawsuit) against you in a foreclosure action while you’re on active duty. (50 U.S.C. App. § 521). (A bank can complete a judicial foreclosure against an absent servicemember, but only under certain circumstances. To learn more, see Foreclosure Protections and the Military: When a Servicemember Gets a Mortgage After Active Duty.)
Stay of proceedings generally. A court can decide to stay a civil action, like a foreclosure, for a period of not less than 90 days under certain circumstances. You have to apply for the stay by writing a letter or other communication explaining why military duty materially affects your ability to appear in court and a date when you could be available. You also have to get a letter or other communication from your commanding officer stating that your current military duty prevents you from appearing and that military leave isn’t authorized at the time of the letter. (50 U.S.C. App. § 522).
Massachusetts foreclosures are usually nonjudicial, which means the process takes place outside court supervision. But Massachusetts nonjudicial foreclosures often involve one related, but separate court proceeding—a servicemember’s case. (Learn more about Massachusetts Foreclosure Laws and Procedures.)
The foreclosing bank will likely file a lawsuit that's independent of the actual foreclosure in the Superior Court Department or the Land Court Department of the Trial Court. This suit is called a servicemember's case. The point of the suit is to figure out whether the borrower is entitled to protections under the SCRA. While filing a servicemember’s case isn’t a required part of the Massachusetts foreclosure process, a foreclosing bank almost always files this kind of suit so that the borrower can’t later claim that the foreclosure was invalid because the bank failed to comply with the SCRA.
Military servicemembers who think they’re entitled to protections under the SCRA should file a timely response (called an "answer") with the court after getting notification that the bank has started a servicemember's case. If you’re not claiming protections under the SCRA, you don’t need to file an answer in the case.
If you're not entitled to protections under the SCRA and think the bank is improperly foreclosing or you have some other defense to the foreclosure, you'll have to file your own lawsuit. Homeowners in this situation should consider talking to an attorney to explore their options for preventing a foreclosure, as well as consider contacting a HUD-approved housing counselor to get information about different foreclosure avoidance (loss mitigation) options, like a loan modification or short sale.
The Massachusetts Department of Veterans’ Services offers various resources for veterans, like a Welcome Home Guide. You may contact the Department of Veterans’ Services at: Commonwealth of Massachusetts, Department of Veterans' Services, 600 Washington St., 7th Floor, Boston, MA 02111, phone: 617-210-5480, email: MDVS@vet.state.ma.us.