State Attorney General Eric T. Schneiderman has launched an investigation into whether 10 lenders have illegally foreclosed on the homes of active-duty members of the military, officials in his office said.
The investigation comes on the heels of a federal regulators report indicating that it would review 4,500 foreclosures on mortgages belonging to soldiers, first reported in the Financial Times.
A 2003 law sets strict standards on the foreclosure process for active-duty soldiers. Soldiers, of course, cannot always show up for civil court hearings. Earlier this year, JPMorgan Chase and Bank of America reached settlements with hundreds of soldiers whose mortgages were foreclosed illegally. The banks apologized for the errors.
Its intended to protect people, said Rep. William L. Owens, D-Plattsburgh, who first heard of Mr. Schneidermans probe via media reports. Im very thankful that Mr. Schneiderman is doing an investigation.
A spokesman for Mr. Schneiderman declined comment.
The north country, home of the 10th Mountain Division, has seen few foreclosures, so those who work closely with soldiers say they havent heard of any examples of a soldier who lost his or her home by unlawful means.
But it is possible, those who work with Fort Drum say, that soldiers have mortgages in other states where they came from that are in foreclosure. It also is possible that the issue has gone under the radar. And, officials in Mr. Schneidermans office said, the investigation will flesh out whether those in New York and the 10th Mountain Division were affected.
Were not experiencing that, said Carl A. McLaughlin, director of the Fort Drum Regional Liaison Organization. That gets right down to the realm of individuals. It may not come up.
A spokesman for the Treasury Departments Office of the Comptroller of the Currency, the regulator that will review whether the foreclosures were carried out properly, said it was important not to jump to conclusions.
The independent foreclosure review provides the opportunity for 4 million people to request a review, Bryan K. Hubbard said. Also included in that review are a number of cases that may involve (service members). We do not want to presuppose the results of that review.
U.S. Sen. Charles E. Schumer, D-N.Y., who sits on the Housing, Banking and Urban Affairs committee in his chamber, called the allegations on foreclosures serious and shocking.
The men and women who serve in uniform should not have their homes taken from them while theyre defending our country, Mr. Schumer said in an email statement. The attorney general is doing the right thing in investigating these claims, and if true, those who have broken the law should face the appropriate consequences.
Mr. Schneiderman, the top lawyer in the state, has earned plaudits for his investigation of the foreclosure crisis.
In August, his refusal to go along with a negotiated settlement prompted his removal from an executive panel of state attorneys general. The attorneys general were looking to settle allegations that faulty documents were used to force people out of their homes. Reuters reported that Mr. Schneiderman would oppose a deal that gives too broad immunity to lenders for actions during the foreclosure mess.
Mr. Owens signed on to a letter with 20 other House Democrats from New York in support of Mr. Schneiderman.
I think once we have the facts, well certainly take a look at the situation, Mr. Owens said. If, in fact, the Service Members Civil Relief Act has been violated, well be looking to support Mr. Schneiderman.