Five of the country’s largest mortgage lenders will be participating in an effort to help active duty military families save hundreds of dollars or more each year with a new program announced by the Obama Administration on Tuesday. The program will enable active-duty servicemen and servicewomen to afford their homes. The White House has stated that the participating bank include Wells Fargo, Bank of America, Ocwen Loan Servicing, CitiMortgage and Quicken Loans. These five banks have agreed to put in to place practices of checking Defense Department databases to ensure that their customers are not missing out on unclaimed benefits.
“We’re announcing a new partnership in which some of America’s biggest banks and financial institutions will simplify the process, proactively notify service members who qualify for lower rates and make it easier to enroll,” Obama said. “In other words, we’re going to help more of our troops and military families own their own home without a crushing debt.”
According to the Government Accountability Office, many service men and women who are protected under the Service members Civil Relief Act (SCRA) do not benefit from the lower fees and rates that come with VA financing. Banks have agreed to make the process less cumbersome for Veterans and to also proactively seek out current Veteran home owners who are eligible for lower rates but have not taken advantage of them.
“It’s clearly the right thing to proactively reach out to active-duty military members and make sure they — and their families — are financially protected,” said Quicken Loans CEO Bill Emerson. “Our military members have enough on their plate without burdening them with the added stress of having to contact their lenders to activate benefits the law entitles them to receive.”
VA financing allows a Veteran to secure a mortgage loan with no money down. Though there is a funding fee paid to the Veteran’s Administration, this funding fee can essentially be rolled into the loan and financed on top of the mortgage loan itself. The rates and fees associated with a VA loan are capped to allow our Veteran’s to finance a home with lower costs than other home loans in the market place.
Many in the housing and mortgage industry have hailed President Obama’s efforts. The need to help our services members be able to sustain their home mortgage payments and take part in the American Dream of owning their own home while they are serving our country here in the United States and abroad has always been apparent. However, this fact has many times been overlooked.
The Financial Services Roundtable industry group came out with a statement in regards to the Presidents efforts to announce that they are also pleased with the program intuitive and that in addition to this roughly 5,500 homes have been donated by affiliated companies to veterans and their families.
Former Secretary of the Navy, John Dalton summoned up sentiments on the announcement when he said “We are proud that the voluntary commitments made in partnership with the White House today reinforce the industry’s overall mission to give back to those who sacrifice the most for this country.”