Bank Settles Military Mortgage Foreclose Case with DOJ
On May 26, 2011, the U.S. Department of Justice announced a $20 million settlement with units of Bank of America and Morgan Stanley to resolve allegations of improper foreclosures on about 160 military members between 2006 and 2009. The government alleged that the foreclosures, many concerning foreclosures that were taken or started by Countrywide Mortgage prior to Bank of America's acquisition, violated the Servicemembers Civil Relief Act (SCRA). In April, JPMorgan Chase & Co. agreed to settle similar allegations in a lawsuit filed in federal court in South Carolina.
The agreement is included in a "Memorandum of Agreement Between the United States of American and Bank of America Corporation." No litigation was filed.
The DOJ's Civil Rights Division has added scores of lawyers and other professionals to its Housing & Civil Enforcement Section, which is charged with enforcing the SCRA and Fair Lending laws, including the Fair Housing Act and Equal Credit Opportunity Act. Continued, aggressive prosecution of cases involving mortgage lending is expected out of that section for the foreseeable future.
