Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage After Going on Active Duty

The Servicemembers Civil Relief Act (SCRA) provides legal relief to military personnel who are in danger of foreclosure.

The Servicemembers Civil Relief Act (SCRA) provides legal relief to military personnel who are in danger of foreclosure. Not only are servicemembers entitled to certain protections from foreclosure for loans taken out before going on active duty, the SCRA also provides some protection if you took out the loan after going on active duty.

Read on to learn more about how the SCRA can help you if you are a military servicemember facing the foreclosure of your home.

Mortgages Taken Out Before Beginning Active Duty

The SCRA states that if you obtained your mortgage loan before you were an active military member, then a foreclosure, sale, or seizure of the property is not valid if made during—or one year after—your period of military service unless:

  • a court issues an order approving the foreclosure (before the foreclosure sale), or
  • the lender gets a written waiver from you allowing it to foreclose. (50 U.S.C. § 3953).

(To learn about other protections for servicemembers who take out a mortgage before going on active duty, see Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage Before Active Duty.)

Protection Against Default Judgments

The SCRA also provides protection against default judgments. (50 U.S. Code § 3931). This protection applies to judicial foreclosures.

How Judicial Foreclosures Work

Judicial foreclosures are completed through the state court system. The lender initiates the process by filing a complaint and having it served on the borrower (and other defendants), along with a summons to appear in court. A default judgment occurs if you fail to respond to the suit, and the judge then rules against you in your absence.

However, the SCRA protects servicemembers against default judgments. So, if you took out your mortgage after going on active duty, even though 50 U.S.C. § 3953 won't apply, a court can't enter a default judgment against you while you're on active duty.

Special Judicial Foreclosure Procedures for Servicemembers

A judicial foreclosure can be completed against an absent servicemember, but only under certain circumstances.

Under the SCRA, a plaintiff (the party that brings a lawsuit) who seeks a judgment must inform the court if the servicemember is on active duty. If neither the servicemember—nor an attorney on his or her behalf—appears in the action, the court can't enter a judgment until after the court appoints an attorney to represent the servicemember. But if an attorney appointed to represent a servicemember can't locate the servicemember, the attorney's actions in the case won't waive any defense the servicemember has or otherwise bind the servicemember.

90-Day Delay

Once a court appoints an attorney to represent the servicemember, that attorney will often seek a stay of proceedings (a delay). If requested by the attorney (or upon the court's own motion), a court will grant a stay of proceedings for a minimum of 90 days if:

  • there might be a defense and the defense can't be presented without the servicemember’s presence, or
  • after due diligence, the servicemember’s attorney has not been able to contact the servicemember or otherwise determine if a meritorious defense exists.

What If the Court Enters a Default Judgment Against You?

If the court enters a default judgment against you during your period of military service—or within 60 days after termination of or release from such military service—you might be able to reopen the case later. You must demonstrate that:

  • your military service substantially affected your ability to defend yourself in the case, and
  • you have a defense to the action.

A request to re-open a judgment must be filed no later than 90 days after the date of the termination of or release from military service.

Mortgage Assistance for Military Servicemembers

If you find yourself facing foreclosure at any time during or after active military duty, contact your loan servicer immediately and ask about loss mitigation options. Most lenders have loss mitigation programs to assist borrowers, including servicemembers, who can't make their mortgage payments.

You might be able to qualify for a loan modification, repayment agreement, forbearance agreement, short sale, or deed in lieu of foreclosure.

More State Protections

In addition to federal law, many states have their own statutes that provide additional protections for servicemembers. To learn more about relevant state laws, check out Appendix A (State Information) in Nolo's The Foreclosure Survival Guide or talk to an attorney.

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