Banks Illegally Foreclosed on Military Personnel

It is now well-known that a culture of cheating pervaded the mortgage industry during the real estate boom, with widespread deception around underwriting practices as lenders scrambled to lend piles of money to anyone with a pulse amid an orgy of greed and irresponsibility.

What is less known is that boom-era cheating also involved illegal foreclosure practices. While those practices have gotten a lot of attention during the bust, they actually started during the boom as the mortgage industry totally lost its ethical compass. 

The latest revelation is that, starting in the early 2000s, lenders foreclosed on scores of properties owned by military personnel serving in Iraq and Afghanistan, including those who sustained injuries in combat, without first obtaining a court order, as required by law.

In May, the Justice Department reached a settlement with Bank of America and Saxon Mortgage for illegally foreclosing on servicemembers. The settlement includes at least $22 million in relief for victims.

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