Prepared Remarks of Secretary Shaun Donovan Media Availability with AG Suthers and Holly Petraeus
Colorado National Guard, Centennial, Colorado
Tuesday, May 15, 2012
Thank you, Attorney General Suthers, for that introduction and your leadership -- and I’d like to thank Major General Edwards for his decades of service to our country.
I also want to offer a special word of thanks to Holly Petraeus, who is doing tremendous work at the Consumer Financial Protection Bureau. Already, the CFPB has been a force for the protection of ordinary families -- and as we can see today, for extraordinary families as well.
All of us here today understand that the men and women who serve in our military are heroes -- who are willing to sacrifice everything for their fellow Americans.
But one thing our servicemembers shouldn’t have to sacrifice is their protections as consumers -- and nowhere was that clearer than during the foreclosure crisis.
As Colorado knows all too well, in the years leading up to the crisis, unscrupulous lenders saw military personnel trying to stay in their homes not as families who needed help -- but as targets for exploitation.
Some lost their homes due to “robo-signing,” in which servicers didn’t review or in some cases even read the foreclosure documents they were processing. Many others sought help on their mortgages but were victimized by dropped calls or lost or delayed paperwork.
Some were forced to sell their homes at a loss simply because their country had asked them to relocate to a different duty station.
And other military families were charged excessive interest on their mortgages while they were still on active duty, even after they had made a valid request to lower it -- a violation of federal law.
That’s not only wrong -- it’s not who we are as Americans.
Democrats and Republicans alike agree that Americans who serve in the military and put themselves in harm’s way shouldn’t have to worry about losing their homes.
That’s one reason why the historic, $25 billion settlement federal officials and a bipartisan coalition of 49 state attorneys general struck with the five largest mortgage servicers was so important.
Indeed, I want to thank Holly and Attorney General Suthers for their work with this settlement to ensure it included provisions specifically tailored to the needs of our troops.
First, in a process overseen by the Justice Department, the servicers covered by this settlement will work to determine if any servicemembers were wrongfully foreclosed on -- and if they were, the families could receive benefits including the payment of lost equity plus interest, with as much as $117,000 in additional bank penalties.
Some families could see the return of their home, debt-free.
A similar review will also be conducted to identify and provide full refunds to any military families that were charged excessive interest on their mortgages despite asking for help.
Third, servicemembers can be compensated if they were forced to take a loss when selling their homes due to military relocation.
But this settlement isn’t just about compensation for the harm families have already suffered. Thanks to the standards we’ve put in place, moving forward, service members will be protected when they are asked to move to serve their country.
As military families know all too well, relocation to another base often means the painful decision to either sell your home at a loss, or keep it and therefore be separated from your family.
But with this settlement, families will be able to sell their home without losing money, or get the modification they need to keep their home -- even if it is rented out or empty.
Finally, to ensure that more veterans can achieve the dream of homeownership, the settlement committed the banks to paying $10 million into the Veterans Housing Benefit Program -- which allows veterans to receive VA-guaranteed loans on terms that make sense for them.
Ultimately, whether it is the benefits this settlement provides to active servicemembers, the work we are doing to end veterans homelessness--work that got one-fifth of homeless veterans off our streets last year alone--or so many other bipartisan efforts, each is about the same thing:
Working across the aisle to ensure that the men and women who are willing to risk their lives for their country get treated with the dignity and respect they deserve.
Building on that work is why I look forward to hearing from our outstanding roundtable participants in just a few moments -- and it’s why I’m so proud to stand here today. Thank you.