Over 700 active duty military members were wrongfully evicted from their homes by Wells Fargo, Bank of America, Citigroup, JPMorgan and Chase, according to federal regulators.
The biggest banks have long claimed that they rarely forced people out of their homes by mistake, but an $8.5 billion settlement deal with the U.S. government shows that simply isn't true.
Ironically, Wells Fargo has claimed in their advertising to support disabled U.S. military servicemen (video below).
The banks' foreclosures against U.S. servicemen violated the Servicemembers Civil Relief Act, a federal law requiring banks to obtain court orders before foreclosing on active-duty members, but the big banks ignored U.S. law and foreclosed anyway.
No one from any of the banks will face jail time.
The New York Times reports:
Complaints that active military personnel and National Guard members were losing their homes while deployed in war zones set off national outrage and prompted Congressional hearings in 2011. The case of Sgt. James B. Hurley, a disabled veteran whose home outside Hartford, Mich., was sold two months before he returned from Iraq, dragged through the courts for years, highlighting the devastating effect of foreclosures.
In 2011, JPMorgan settled claims that it inappropriately foreclosed on 18 military service members and overcharged 6,000. Bank of America and Morgan Stanley also struck a pact with the Justice Department to settle claims they foreclosed on 178 military members between 2006 and 2009. Sergeant Hurley has since reached a settlement with Deutsche Bank in his case.
But the problems are more extensive than the wave of cases indicated.
When regulators forced them to take a close look at their loans, JPMorgan, Wells Fargo and Bank of America, the largest loan servicers, each discovered about 200 military members whose homes were wrongfully foreclosed on in 2009 and 2010, according to the people with direct knowledge of the findings. Citigroup had at least 100 such foreclosures.
Source: New York Times