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.
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.
The waiver must be prepared as per the requirements listed in §517 of SCRA, which are listed below.
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.
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.
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.
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.
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.
§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.
Updated: Jan 01, 2014