Topic: Servicemembers Civil Relief Act (SCRA)
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If a service member enters into a new loan during his full time service, is that loan subject to the SCRA 6% rate? Does the lower rate only apply to loans which were entered into before the service member was called to full time service?
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No. We believe a loan that the service member has entered into during a period of active service would not be subject to the Servicemember Civil Relief Act (SCRA) 6% interest rate limitation. The SCRA interest rate limitation applies only to obligations or liabilities entered into before the service member enters military service. The relevant…
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When a borrower is delinquent on a mortgage loan, we send out the SCRA notice and the Illinois Homeownership Counseling Notice after thirty days and the Federal Notice of Homeownership Counseling after forty-five days. Are there any other notices we should be sending?
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Please note that this answer discusses the Illinois grace period notice requirement, which expired on July 1, 2016, pursuant to a sunset provision. Please see 735 ILCS 5/15-1502.5. Beyond the SCRA and Homeownership Counseling notices required under federal law (12 USC 1701x(c)(5)), and the Grace Period Notices required under Illinois law (735 ILCS 5/15-1502.5), we…
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For purposes of sending SCRA notices for consumer loans, is it sufficient to send the notice to the business address for a loan secured by a primary residence, or do we have to send the notice to the individual who owns the residence as well?
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Because there are no explicit requirements as to which notice to use for issuing HUD’s required SCRA notice, we do not see any problems in sending the notice to a business address when the business is making the loan. The Housing and Urban Development Act requires creditors to “provide notice” to eligible homeowners, but it…
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Can we use the current HUD notice that references 30 days, even though it conflicts with the expanded coverage of the IL SCRA of 29 days?
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As to the HUD SCRA notice, we believe that you should follow the federal notice requirements and provide the HUD notice as-is, even though it does not explain the Illinois law’s requirements (for example, the 29 consecutive days of service requirement and the protection of service members on state active duty). We are not aware…