Lawsuit filed against CitiBank for illegal foreclosures on military personnel

Army National Guard training exercise at Fort Hood, photo by Spc. Eric Liesse.

Servicemembers’ Civil Relief Act

JP Morgan Chase has settled a class action suit for violating the nearly 70 year old Servicemembers’ Civil Relief Act(SCRA) which states that even when legal and in states that don’t require it, only a judge can authorize a foreclosure and only after a hearing where military members are represented. The law is in place to protect active duty military members from financial duress.

In April of this year, a class action lawsuit was lost by JPMorgan Chase, awarding $56 million to the troops and reforming Chase’s treatment of American military. Similarly, Deutsche Bank was sued for illegally foreclosing on a soldier.

New illegal foreclosures

Texas Army National Guard Sergeant Jorge Rodriguez has petitioned for class action suit for SCRA violations as filed in Federal Court in New York against Citigroup, Inc.

Sgt. Rodriguez’ Del Valle, Texas home was allegedly illegally foreclosed on while he was preparing to be deployed to Iraq in May 2006, as he was in training at Fort Hood. The foreclosure took place while he was on “lock down” wherein he was not allowed to communicate with outsiders for 90 days.

Coming home to no house

Rodriguez said the foreclosure occurred three months after he had begun training at Fort Hood, where he was “on lock down” and could not communicate with outsiders. While on active duty he was unable to make payments on his mortgage and was completely unaware of the illegal foreclosure until he returned home in August 2007 after an 11 month tour in Iraq.

His home sold for $137,900 at auction, $13,400 more than his original mortgage. The suit notes that Rodriguez did not receive and proceeds from the sale.

Seeking class action status

In court papers, Rodriguez said he was moved to file for class action status because “this was not an isolated incident. CitiMortgage initiated thousands of foreclosure proceedings across the United States without adequate safeguards to ensure that service members on active duty were not targeted.”

The class action suit seeks possession of the homes restored to the armed service members allegedly illegally foreclosed upon as well as compensatory and punitive damages.

Rodriguez is not, as he implies, alone. Service members are returning home to foreclosed houses without a judicial ruling, interest rates above 6% (also illegal under SCRA), evictions not in line with SCRA and more.