Soldiers' & Sailors' Civil Relief Act

Who can receive the reduced interest rate of 6%?

Career military and Reserve members who closed their loan before entering active military service. Members are considered to have entered active military service when they are on active duty (working in the Armed Forces fulltime). The date they entered active military service must occur after the loan has closed. "Entering active military service" begins on the date the person receives the order of induction or order to report for active military service or active duty (working fulltime).

Once the loan has closed, how does a borrower apply for relief under the Act?

Copies of military orders must be sent to the mortgage company servicing the loan. Simply call your mortgage lender at their toll free number and find out exactly where to send the papers.

If the customer's loan is in process and they receive their orders to enter active military service before the loan closes, are they entitled to reduce their interest rate to 6% after the loan closes?

NO. For example, if the customer is in the Reserves and closes their loan after they receive their orders to enter active military service, they are not eligible for the reduction in rate because the Act applies to individuals who signed their note and mortgage prior to entering into active military service. "Entering active military service" begins on the date the person receives the order of induction or order to report for military service. For a person in the Reserves, it would apply when they receive their orders to report to active duty (fulltime).

If they close the loan before they receive their orders to enter active military service, they would be entitled to the reduction in rate after closing as long as they can provide a copy of the military orders to Servicing.

How long does the rate reduction apply?

The rate reduction applies as long as the person is in active military service and ends on the date they are released from active military service.

Does a person have to be called to a war zone or military zone to be considered active in the military service or on active duty?

NO. The Act applies to "persons in the military service" as stated above.

Are there other rights under the Soldiers' and Sailors' Civil Relief Act?

YES. There are some limitations on actions that lenders can take in foreclosure proceedings and other provisions in the Act related to all obligations and liabilities at 50 U.S.C. App, Sections 501 et seq. Fannie Mae also provides guidelines related to the Act in part VII, Sections 304 of the Servicer's Guide. HUD and other investors also have information regarding the Act.