Pub. 4 2013 Issue 2

summer 2013 9 foreclosures and must occur “within thirty days of his or her hiring, promotion or transfer.” In addition to training for Countrywide’s employees, the agreement requires that Countrywide obtain from its vendors similar signed documents regarding the SCRA and that similar training be provided. • Audits. The Consent Order requires Countrywide to engage in two separate audits: one for foreclosure and one for interest rates. The data for the foreclosure review is required to be submitted to the DOJ for identification of any foreclosures involving a borrower entitled to SCRA protection at the time of the foreclosure sale, as the individuals identified in this review are entitled to compensation. A DOJ pre-approved independent accounting firm is to conduct the interest rate audit to “review a statistical sample” of mortgages from January 1, 2008 through December 31, 2010, to determine whether Countrywide had complied with the interest rate provisions of the SCRA and had “otherwise complied in all respects with Section 527 of the SCRA.” • Compensation. Countrywide is required to establish a $20,000,000 fund to compensate those military members whose SCRA rights were violated between January 1, 2006 and May 31, 2009. Countrywide must request deletion of negative information in the individuals’ credit reports. Regarding the distribution of the compensation, Countrywide must provide the DOJ with monthly updates on received releases, remitted settlement checks, and undeliverable mailings. As part of the DOJ’s continuing oversight, correspondence to each borrower relating to the potential for compensation is to be reviewed and approved by the DOJ as are deadlines proposed by Countrywide relating to the return of the releases. In the second case, the court-approved settlement included a class benefit fund of $3.6 million as well as changes to the SCRA policies and procedures relating to loans that will benefit servicemembers in the future. Although not part of the settlement, Bank of America, which had purchased Coun- trywide after the lawsuit was filed, voluntarily “implemented a policy that servicemembers who are entitled to the 6% inter- est rate under the SCRA will actually receive a 4% interest rate on their loans.” As these two cases illustrate, the courts, the United States government, and individuals take compliance with the SCRA and the treatment of servicemembers very seriously. Finan- cial institutions that engage in consumer lending must be aware of the specific requirements the SCRA imposes on them and must make every effort to comply with its pro- visions. Failure to comply with the SCRA may not only impose financial penalties on a financial institution, but may also result in continuing government oversight of the institu- tion’s operations and bad customer relations. Q Failure to comply with the SCRA may not only impose financial penalties on a financial institution, but may also result in continuing government oversight of the institution’s operations and bad customer relations. Angela L. Beblo is a Senior Attorney at Spilman Thomas & Battle, PLLC. Her primary areas of practice are consumer finance, litigation and mine safety law. Contact Angela Beblo at 304.340.3852 or abeblo@ spilmanlaw.com. Brienne T. Marco R. Barry is an Associate at Spilman Thomas & Battle, PLLC. Her primary areas of practice are consumer finance and general litigation. Contact Brienne Marco at 304.720.4060 or bmarco@ spilmanlaw.com. Resourceful. Responsive. Reliable. Do business with someone who thinks like you. www.CBBonline.com 804.239.0452