The Servicemembers Civil Relief Act (SCRA) provides the strongest foreclosure protections in American law for active-duty military personnel. Key protections include: (1) a 90-day stay of foreclosure proceedings, (2) a 6% interest rate cap on pre-service debts including mortgages, and (3) a prohibition on non-judicial foreclosure without a court order during active duty and for one year after. Violations carry serious penalties — including criminal sanctions in egregious cases. At Dream Financial Management, we help servicemembers assert SCRA rights nationwide since 1994.
A lender cannot foreclose on a servicemember's property without a court order if: (1) the mortgage originated before the servicemember's active duty began, (2) the servicemember is on active duty or within one year after, AND (3) the servicemember made at least one payment before active duty. This applies to both judicial and non-judicial foreclosure. Foreclosure without a court order during this protected period is void — not just voidable. This is the strongest foreclosure protection in federal law.
All pre-service debts — including mortgages — are capped at 6% APR during active duty. The excess interest is permanently forgiven, not deferred. You must request the cap in writing with a copy of your orders. The lender must grant it. Some lenders (Chase, USAA, Navy Federal) apply it automatically.
Servicemembers can request a 90-day stay of any civil proceeding — including foreclosure. Must be granted unless the court finds your military service does not materially affect your ability to participate. Can be extended beyond 90 days.
Before a default judgment can be entered against a servicemember, the plaintiff must file an affidavit stating whether the defendant is in military service. If the defendant is in service, the court must appoint an attorney. Default judgments entered without SCRA compliance are void.
SCRA violations can invalidate the entire foreclosure. Dream Financial Management helps servicemembers assert SCRA protections, enforce the 6% cap, and stop illegal foreclosures. Since 1994. Free consultation.