District court: No SCRA foreclosure protections for servicemember not on the note

Courts SCRA Military Lending Mortgages Foreclosure

On September 23, the U.S. District Court for the Eastern District of New York held that an active duty servicemember could not avail herself of the foreclosure protections provided by the Servicemembers Civil Relief Act (SCRA) even though she was a signatory on the mortgage, because she was not a signatory on the note. According to the opinion, the SCRA foreclosure protections are afforded only to an “obligation on real . . . property” which is “secured by a mortgage” and that it is the note “which evidences the obligations, i.e. the promise to pay the debt.” By signing the mortgage, the servicemember-spouse “merely mortgaged her interest in the property, to secure her husband’s obligation to pay.” Accordingly, the court vacated a prior stay of foreclosure.