Federal and State Legal/Foreclosure Protections for Active-Duty Servicemembers

CONSUMER ALERT

BILL SCHUETTE
ATTORNEY GENERAL

The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern. Consumer Alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.

Federal and State Legal/Foreclosure Protections for Active-Duty Servicemembers

Overview

The federal Servicemembers Civil Relief Act (SCRA) provides certain legal protections to military personnel while they are on active duty. In addition, Michigan's Act 138 of 2008 protects against certain types of foreclosures for military personnel while they are on active duty and up to six months after their tour of duty has ended. 

Michigan's Foreclosure Protections

In Michigan, Public Act 138 of 2008 created state protections regarding foreclosure of property owned by military personnel on active duty. It prohibits foreclosure by advertisement (the most common type of foreclosure proceeding in Michigan) of servicemember's homes while they are on active duty and up to six months following their term of active duty. As with the federal law, court-ordered foreclosures are still permitted.

If a servicemember owns eligible mortgaged property, and that property was foreclosed upon by advertisement or sold under the power of sale, then that foreclosure or sale is invalid if it was done either while the servicemember was on active duty or up to six months following the term of active duty unless otherwise ordered by a court. Persons or entities that violate this Act are subject to civil fines.

Public Act 138 does not apply to foreclosure of mortgages that were entered into prior to May 21, 2008. 

The Servicemembers Civil Relief Act (SCRA)

The SCRA offers a variety of protections.  First, the law provides for the temporary suspension of legal proceedings and transactions that could adversely affect servicemember's legal rights. Servicemembers may generally obtain a stay of any pending civil or administrative action until 90 days after their service terminates; the court may extend this period; and a request for a stay may be filed after active duty within the same 90-day period. Thus, the SCRA can protect an active-duty servicemember against foreclosure and evictions, debt collection proceedings, and other legal actions.  However, as with the state law, court ordered foreclosure is permitted.

The SCRA also enables active-duty military personnel, under certain circumstances, to terminate a lease or rental agreement for a dwelling or an automobile.  In addition, lenders must generally reduce the annual interest rate on an outstanding mortgage loan debt to no more than 6% during the period of military service and one year thereafter.

Where to Find More Information on the SCRA

A detailed guide to the SCRA, "A Judge's Guide to the Servicemembers Civil Relief Act," is available through the American Bar Association's Section of Family Law, Military Committee. This excellent resource not only explains the law, but it also contains a model motion for a stay of proceedings, supporting letters, flowcharts, and a checklist for judges.  You may wish to provide a copy of the Judge's Guide to your private attorney or to any court in which legal actions are pending. (To make sure you have the most recent version of the Judge's Guide, and for other useful information, you may wish to visit the Military Committee's home page.

The statutory citation in the United States Code for the SCRA is: 50 U.S.C. § 501 et seq.  

Where to Turn for Help 

Despite these legal protections, some active-duty personnel continue to experience legal difficulties when landlords, debt collectors, lenders, and other creditors pursue legal actions despite the SCRA and the Michigan Act.

Because the protections available will differ from case to case, the Attorney General recommends obtaining legal assistance through the Armed Forces. Most military bases have a legal assistance office; find the nearest office by searching the Armed Forces Legal Assistance Locator.

To request verification of active duty status, you may contact:

Defense Manpower Data Center [Attn: Military Verification]
1600 Wilson Blvd., Suite 400
Arlington, VA 22209-2593
Phone: 703-696-6762 or 703-696-5790
Fax: 703-696-4156

Contact the Attorney General 

If you have a complaint regarding a business that refuses to recognize your rights under the SCRA or the Michigan Act, you may contact the Attorney General's Consumer Protection Division at:

Consumer Protection Division
P.O. Box 30213
Lansing, MI  48909
Phone:  517-3173-1140; Toll free:  877-765-8388
Fax:  517-241-3771
Online complaint form