Mortgages Analyzed
Mortgages Analyzed
Mortgages Analyzed
 
Waiver of SCRA Rights

What is Waiver of SCRA Rights?

Waiver of SCRA Rights

Waiver of Servicemember's Rights is a letter where the servicemember waives any of the rights and protections provided by the Servicemembers Civil Relief Act (SCRA). Some jurisdictions require the waiver to be executed as an affidavit in the presence of a notary.

SCRA entitles the servicemembers who are in military service to certain protections and benefits such as interest rate limitations, protections from default judgment and foreclosure, and eviction from premises. §517 of SCRA contain the provisions that allow a servicemember to waiver these rights. With respect to mortgages, the waiver letter allows the lender to proceed with foreclosure, to evict the borrower, or to obtain other remedies.

Source :www.MortgagesAnalyzed.com

Contents of the Waiver of Servicemembers Rights

SCRA does not prescribe specific contents of the waiver letter. However, some jurisdictions have developed forms and templates that must be used when executing the waiver. Before executing the waiver, you should find out the requirements of the waiver for the jurisdiction where your case is being heard.

Source :www.MortgagesAnalyzed.com

Requirements for Preparing the Waiver

The waiver must be prepared as per the requirements listed in §517 of SCRA, which are listed below.

  1. Written: It must be in writing.
  2. Separate Document: It must be on a separate document. The waiver cannot be built into the contract or agreement that created the loan.
  3. 12 Point Font: The waiver must be on a minimum 12 point font.
  4. Reference to Mortgage: The waiver must specify the legal instrument to which the waiver applies. For this purpose we recommend that it specify the loan agreement or promissory note and also the account number.
  5. Timing: The waiver must be executed during or after a servicemember's period of military service are effective. Waivers entered prior to the start of the military service are invalid.
Source :www.MortgagesAnalyzed.com

Borrower's Considerations

Seek Legal Counsel before Executing Waiver

You should evaluate the implications of the waiver before executing it. Remember, you are foregoing your rights under SCRA that protect you while you are in military service. You should consult an attorney or another competent person who can provide unbiased opinion on the effects of executing the waiver for your particular circumstances. You should also consider contacting Legal Assistance Office for help. Use the military Legal Assistance Office locator for all branches of the Armed Forces to find out the nearest Legal Assistance Office.

When Not to Execute Waiver

Do not execute a waiver if the servicer is asking that you need to waive your rights under SCRA or any other law as a condition of being evaluated for eligibility for assistance. The assistance may be in the form of potential loan modification, forbearance, or other alternatives. Any broad waiver of your rights should be reviewed by your attorney.

Source :www.MortgagesAnalyzed.com

Using Waivers for Strategic Default

If your outstanding mortgage loan is significantly higher than the value of the property and you are taking route of a strategic default, then you may execute a waiver to proceed with the foreclosure. In this case, the waiver will speed up the foreclosure process. Strategic defaults are complicated in nature and have implications broader than the mortgage loan itself. The discussion here is limited to the potential use of the waiver if you have decided to pursue strategic default. However, this is not a discussion on the ramifications and appropriateness of strategic default.

Source :www.MortgagesAnalyzed.com

Lender's Considerations

Servicers Covered Under National Mortgage Settlement

In February 2012, 49 state attorneys general and the federal government announced a settlement with the five largest mortgage servicers in US that include Ally/GMAC, Bank of America, Citi, JP Morgan Chase, and Wells Fargo. If you are a servicer that is covered under the National Mortgage Settlement, then you should consider the following when you are initiating or pursuing a waiver.

  1. The waiver process must be initiated at least 30 days in advance of any anticipated foreclosure sale date.
  2. You must send a notice and a copy of the proposed waiver to the servicemember in the form attached as Exhibit 1 of the Settlement.

Servicers Not Covered Under National Mortgage Settlement

The National Mortgage Settlement prescribes extensive servicing standards. You should consider implementing the same standards even if you are not covered under the settlement. Therefore, when initiating or pursuing the waiver, you should follow the same standards as listed in the section above.

Source :www.MortgagesAnalyzed.com
 

Document Summary

 
Waiver of SCRA Rights
Purpose
Waiver of SCRA Rights is a letter where the servicemember waives any of the rights and protections provided by the Servicemembers Civil Relief Act (SCRA).
Use in Mortgages
With respect to mortgages, the waiver letter allows the lender to proceed with foreclosure, to evict the borrower, or to obtain other remedies.
Other Names
  • Waiver of SCRA Rights
  • Waiver of Rights Afforded Under the Servicemembers Civil Relief Act
  • Waiver of Rights Under Servicemembers Civil Relief Act
  • Waiver of Servicemember Rights
Type
Letter (Affidavit in some jurisdictions)
Provided By
Servicemember (Borrower)
Provided To
Lender/Servicer
Notarization Required
In some jurisdictions
Signed By
Servicemember (Borrower)
Life Cycle Stage
Servicing
Recordkeeping
Record retention period is not specified by SCRA. Other State and local laws may have separate requirements.
Model Form
N.A.
Applicable Laws
  • Servicemembers Civil Relief Act (50 USC Appendix §§ 501 et seq.)
  • Local jurisdictions may have additional requirements
Source :www.MortgagesAnalyzed.com

Regulatory Citations

§517 of SCRA contain the provisions that relate to the waiver and are reproduced below.

(a) In general

A servicemember may waive any of the rights and protections provided by this Act [sections 501 to 515 and 516 to 597b of this Appendix]. Any such waiver that applies to an action listed in subsection (b) of this section is effective only if it is in writing and is executed as an instrument separate from the obligation or liability to which it applies. In the case of a waiver that permits an action described in subsection (b), the waiver is effective only if made pursuant to a written agreement of the parties that is executed during or after the servicemember's period of military service. The written agreement shall specify the legal instrument to which the waiver applies and, if the servicemember is not a party to that instrument, the servicemember concerned.

(b) Actions requiring waivers in writing

The requirement in subsection (a) for a written waiver applies to the following:

(1) The modification, termination, or cancellation of—
(A) a contract, lease, or bailment; or
(B) an obligation secured by a mortgage, trust, deed, lien, or other security in the nature of a mortgage.

(2) The repossession, retention, foreclosure, sale, forfeiture, or taking possession of property that—
(A) is security for any obligation; or
(B) was purchased or received under a contract, lease, or bailment.

(c) Prominent display of certain contract rights waivers

Any waiver in writing of a right or protection provided by this Act [sections 501 to 515 and 516 to 597b of this Appendix] that applies to a contract, lease, or similar legal instrument must be in at least 12 point type.

(d) Coverage of periods after orders received

For the purposes of this section—
(1) a person to whom section 106 [section 516 of this Appendix] applies shall be considered to be a servicemember; and
(2) the period with respect to such a person specified in subsection (a) or (b), as the case may be, of section 106 [section 516 of this Appendix] shall be considered to be a period of military service.

Source :www.MortgagesAnalyzed.com

Updated: Jan 01, 2014

Comments

comments powered by Disqus
Servicemember waives any of the rights and protections provided by the Servicemembers Civil Relief Act
Finance
Know all there is to know about the US Mortgage Industry. We help you to make a well informed decision.
Finance
Loan Products
Confused about the choosing right loan product for you? We help you decide the loan product that suits your needs best.
Loan Products
Documents
Here you will find all there is to know about the forms, papers & documents required for Home Loan Mortgage and much more.
Documents
Regulation
List of all the Regulations related to US Mortgage Industry.
Regulations